Question: WorldGone, Inc. declared bankruptcy on September 25, 2018 through a Chapter 7 filing. WorldGone's balance sheet at the time of the bankruptcy filing is listed
WorldGone, Inc. declared bankruptcy on September 25, 2018 through a Chapter 7 filing. WorldGone's balance sheet at the time of the bankruptcy filing is listed below.
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The accrued wages were earned within the last 90 days prior to filing for bankruptcy. The unpaid employee benefits were due in the six months prior to the filing for bankruptcy. The unsecured customer deposits are for less than $900 each. WorldGone, Inc. has no property taxes past due. The first mortgage is secured against the fixed assets of the firm. The debentures are subordinate to the notes payable to banks. The liquidation of the firm's current assets produced $2,263 million and of the firm's fixed assets produced $3,722 million for a total of only $5,985 million in funds to distribute to the creditors and stockholders of the firm.
The administrative expenses associated with the bankruptcy totaled $25 million and unpaid expenses incurred after the filing of the bankruptcy petition but before the trustee was appointed totaled $10 million. Show how the trustee will distribute the $5,985 million of funds among the WorldGone's creditors and stockholders.
WorldGone, Inc. Balance Sheet as of September 25,2018 millions of dollars Liabilities and Equity Assets Current assets Current liabilities Cash andmarketable Accrued wages (10,000 employees) Unpaid employee benefits Unsecured customer deposits Accrued taxes Accounts payable Notespayable to banks Accounts receivable Inventory 263 1,428 15 69 252 2.100 Total $3,791 1975 Fixed assets Total $3,040 Gross plant and $7,752 1248 equipment Long-term debt Less: Depreciation $1,232 First mortgage Subordinate debentures Net plant and equipment 2.214 $6,504 Total $3,446 Stockholders' equity: Common stock and paid-in suiplus Retained eamings Prefered stock (100 million shares) S 100 2,500 (200 million shares) 1209 S3,809 510,295 Total Total assets 510,295 Totalliabilities and equity
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The distribution of the 5985 million of funds is as follows Proceeds from liquidation of assets 5985m Administrative expenses associated with the bank... View full answer
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