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Problem regarding the pierre imports

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Reference no: EM13857170

Pierre Imports will be liquidated. Its current balance sheet is shown below. Current assets are sold for $600,000 and fixed assets are sold for $1,000,000. All fixed assets are pledged as collateral for all mor tgage bonds. Subordinated debentures are subordinate only to notes payable. Trustee costs are $100,000.

Balance Sheet Before Default

Current Assets

1200000

Accounts payable

400000

Net Fixed Assets

1800000

Accrued taxes

80000

 

 

Accrued Wages

60000

 

 

Notes payable

60000

 

 

Total current liabilities

600000

 

 

First-mortgage bonds

900000

 

 

Second-mortgage bonds

400000

 

 

Debentures

500000

 

 

Subordinated debentures

300000

 

 

Common stock

200000

 

 

Retained earnings

100000

Total Assets

3000000

Total claims

3000000

a. How much will SHs receive?

b. How much will mortgage bondholders receive?

c. How much will prior ity creditors receive?

d. Identify the remaining general creditors. How much will each receive before subor dination adjustment and after adjustment?

Reference no: EM13857170

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