Consider Failures Galore Inc using the following tables:

Balance Sheet, Failures Galore, Inc.*
Assets					Liabilities and Equity
Current assets		$	3,000,000		Accounts payable		$	1,000,000
Fixed assets, net			3,300,000		Bank notes payable			1,000,000
					Accrued wages			100,000
					Accrued taxes			200,000
					Mortgage bonds			1,000,000
					Debentures			1,000,000
					Subordinated debentures			1,000,000
					Preferred stock			500,000
					Common equity			500,000
Total assets		$	6,300,000		Liabilities and equity		$	6,300,000
*The subordinated debentures are subordinate to the bank notes payable. Assume that all the accrued wages can be paid out of the liquidation proceeds.

Distribution of the Proceeds from the Liquidation of Failures Galore, Inc.
Total liquidation proceeds			$3,200,000
	1. Bankruptcy administration expenses		$450,000
	2. Wages owed to employees		100,000
	3. Taxes owed to governments		200,000
Total priority claims			$750,000
Funds available for claims of creditors			$2,450,000
	4. Payment to mortgage bondholders (proceeds from sale of secured assets)		750,000
Funds available for claims of general and unsecured creditors			$1,700,000

		=
		=
		=	40%

					Settlement,			Settlement,
					40% of Claim			40% of Claim
					(Before Subordination			(After Subordination
		Total Claim			Adjustment)			Adjustment)
Accounts payable		$	1,000,000		$	400,000		$	400,000
Bank notes payable			1,000,000			400,000			800,000
Mortgage bonds			250,000			100,000			100,000
Debentures			1,000,000			400,000			400,000
Subordinated debentures			1,000,000			400,000			0
		$	4,250,000		$	1,700,000		$	1,700,000
Funds available for preferred and common stockholders						$0

1. If total liquidation proceeds are $2.5625 million, what is the distribution of these proceeds among the various creditors of Failures Galore? Round your answers to the nearest dollar.

   		Settlement,
   		(After Subordination Adjustment)
   Accounts payable		$
   Bank notes payable		$
   Mortgage bonds		$
   Debentures		$
   Subordinated debentures		$
   		$

   Funds available for preferred and common stockholders: $

2. If total liquidation proceeds are $3.8375 million, what is the distribution of these proceeds among the various creditors of Failures Galore? Round your answers to the nearest dollar.

   		Settlement,
   		(After Subordination Adjustment)
   Accounts payable		$
   Bank notes payable		$
   Mortgage bonds		$
   Debentures		$
   Subordinated debentures		$
   		$

   Funds available for preferred and common stockholders: $