What percentage of the monies owed to unsecured (ordinary) creditors will be paid out in this...

 

Transcribed Image Text:

What percentage of the monies owed to unsecured (ordinary) creditors will be paid out in this bankruptcy? (I need a simple percentage, nothing else) Order of creditors under law: 1. Secured creditors (e.g. mortgages, loans with compensating balances, loans with collateral held by the lender, promissory notes payable, etc.) 2. Trustee fees as set by the court and liquidation reduction from the balance sheet. 3. Employee salaries and wages payable. 4. Taxes payable. 5. Ordinary creditors (accounts payable, short term and long term unsecured loans) 6. Bondholder principal 7. Preferred shareholders at par. 8. Common shareholders at par. This company is in creditors' administration and the trustee has determined the business cannot be saved. Account Liquidated Value after Sale of Assets (cash received) Cash on hand $500,000 Accounts receivable $1,400,000 Inventory $2,200,000 Land $3,500.000 Buildings $5,000,000 Book Value in in Acct System $500,000 $1,700,000 $3,400,000 $4,700,000 $8,000,000 Land $3,500.000 Buildings $5,000,000 Equipment $3,000,000 Creditors: Accounts Payable Notes Payable Taxes Payable Salaries Payable Mortgage on land First mortgage on building Second mortgage on building Other debts Euuity: Preferred stockholders Common shareholders Retained Earnings $4,700,000 $8,000,000 $7,000,000 $2,000,000 $1,000,000 $700,000 $400,000 $3,500,000 $4,000,000 $1,600,000 $4,500,000 $4,500,000 $6,500,000 ($3,400,000) What percentage of the monies owed to unsecured (ordinary) creditors will be paid out in this bankruptcy? (I need a simple percentage, nothing else) Order of creditors under law: 1. Secured creditors (e.g. mortgages, loans with compensating balances, loans with collateral held by the lender, promissory notes payable, etc.) 2. Trustee fees as set by the court and liquidation reduction from the balance sheet. 3. Employee salaries and wages payable. 4. Taxes payable. 5. Ordinary creditors (accounts payable, short term and long term unsecured loans) 6. Bondholder principal 7. Preferred shareholders at par. 8. Common shareholders at par. This company is in creditors' administration and the trustee has determined the business cannot be saved. Account Liquidated Value after Sale of Assets (cash received) Cash on hand $500,000 Accounts receivable $1,400,000 Inventory $2,200,000 Land $3,500.000 Buildings $5,000,000 Book Value in in Acct System $500,000 $1,700,000 $3,400,000 $4,700,000 $8,000,000 Land $3,500.000 Buildings $5,000,000 Equipment $3,000,000 Creditors: Accounts Payable Notes Payable Taxes Payable Salaries Payable Mortgage on land First mortgage on building Second mortgage on building Other debts Euuity: Preferred stockholders Common shareholders Retained Earnings $4,700,000 $8,000,000 $7,000,000 $2,000,000 $1,000,000 $700,000 $400,000 $3,500,000 $4,000,000 $1,600,000 $4,500,000 $4,500,000 $6,500,000 ($3,400,000)

Answer rating: 100% (QA)

Answer T OTAL ASS ETS 50 200 000 TOTAL DE B TS EQU ITY 50 200 000 The trustee will pay out 100 of the money owed to ordinary creditors The percentage ... View the full answer