Scribd
Upload
46 views3 pages

Running Head: LIQUIDATION

1) The company liquidated assets for $3.5 million, paid off the first mortgage and fees/expenses, leaving $3.27 million available for creditors. 2) General creditors had $1.875 million in total claims that received a 100% distribution from the available funds. 3) After paying creditors, $1.395 million remained for common stockholders, which was 74.44% of the original equity amount.

Uploaded by

Carlos Alphonce
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
46 views3 pages

Running Head: LIQUIDATION

1) The company liquidated assets for $3.5 million, paid off the first mortgage and fees/expenses, leaving $3.27 million available for creditors. 2) General creditors had $1.875 million in total claims that received a 100% distribution from the available funds. 3) After paying creditors, $1.395 million remained for common stockholders, which was 74.44% of the original equity amount.

Uploaded by

Carlos Alphonce
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 3

Running head: LIQUIDATION

Liquidation

Name

Institution
LIQUIDATION

Distribution of proceeds on liquidation

 Proceeds from sale 3500000


of assets
First mortgage, paid 0
from sale of assets
Fees and expenses of 229250
administration of
bankruptcy
 Wages due workers 0
earned within 3
months 
prior to filing of
bankruptcy petition
 Taxes 0
Unfunded pension 0
liabilities
Available to general 3270750
creditors

Distribution to general creditors:

Claims of Claim  Application After Percentage


General (1) of 100% Subordination of
Creditors $ Distribution Adjustment Original
(2) $ (3) $ Claims
Received
(4) %
Notes 750000 750000 750000 100%
payable
Accounts 375000 375000 375000 100%
payable
Subordinate 750000 750000 750000 100%
d debentures
Total 187500 187500 187500
LIQUIDATION

Remaining cash = 3270750 - 1875000 = 1395750

$1395750 will go to the common stockholders.


They will recieve only 74.44% (1395750/1875000*100) of the amount of equity in Balance
sheet.

You might also like