Reference no: EM132869186

F Company has been experiencing financial difficulties for a long time and to avoid future losses, the company decided to liquidate. The trustee appointed by the Securities and Exchange Commission gathered the following information:

Cash 321,000
Notes receivable, net 1,200,000
Accounts receivable, net 2,610,000
Merchandise inventory 2,400,000
Prepaid insurance 30,000
Furniture and fixtures, net 240,000
Delivery equipment, net 1,080,000
Goodwill 1,500,000
Total 9,381,000

Salaries and wages payable 24,000
Notes payable 3,000,000
Accrued interest 48,000
Accounts payable 4,080,000
Ordinary shares 3,000,000
Share premium 300,000
Deficit (1,071,000)
Total 9,381,000

I. Only 3/4 of the notes receivable and 1,950,000 of the accounts receivable are expected to be collectible
II. The fair value of merchandise inventories is estimated at 75% of book value
III. The delivery equipment can be realized at 840,000
IV. Furniture and fixtures have fair values of 30,000 more than the book value
V. Notes payable of 85,000 with accrued interest of 27,000 is secured by the delivery equipment
VI. Merchandise inventories with a book value of 1,800,000 secure 40% of the notes payable with related accrued interest of 12,000
VII. F incurred taxes of 120,000 and liability to trustee of 400,000

Question 1: How much is the net free assets?

Question 2: How much is the estimated deficiency to unsecured creditors?

Question 3: What is the estimated net gain/(loss) on realization of assets?

Question 4: How much is the estimated payment to partially secured creditors?

Question 5: What is the estimated recovery percentage for unsecured without priority liabilities?