Jacob’s Jewels is preparing for liquidation (balance sheet in $ millions). Trustee’s costs total $2M. Sale of the fixed assets, which were pledged as collateral to the mortgage bondholders, brought in $50M, while the current assets were sold for another $40M. The firm has no accrued taxes or wages. The debentures are subordinated to the notes payable. How are the proceeds from the sale of assets distributed to all stakeholders?

QUESTION:

 In the text box below, clearly state how the proceeds from the sale of assets are distributed to all stakeholders.

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Current assets $100 First mortgage 50 Fixed assets 115 Notes payable 75 Subordinated bond 50 Common equity 10 Total assets $215 Total liabilities & equity $215 Current assets $100 First mortgage 50 Fixed assets 115 Notes payable 75 Subordinated bond 50 Common equity 10 Total assets $215 Total liabilities & equity $215