Go-for-Broke Company is being liquidated under Chapter 7 of the bankruptcy code.

When it filed for bankruptcy, its balance sheet was as follows:

Assets Liabilities and Equity Current assets $14,500,000 Accounts payable $12,145,000 Fixed assets Accrued wages* 2,030,000 Land and buildings (net) 6,525,000 Accrued taxes 1,160,000 Equipment 7,975,000 Notes payable (bank)** 1,350,000 Total assets $29,000,000 Total current liabilities $16,685,000 Mortgage bonds*** 4,775,000 Debentures 2,450,000 Stockholders’ equity 5,090,000 Total liabilities and equity $29,000,000

*All accrued wages must be paid out of the liquidation proceeds.

**The bank loan is unsecured.

***Mortgage bonds are secured by land and buildings.

Assume that the liquidation is a voluntary petition, that no unpaid contributions to employee benefit plans exist, and that no customer layaway deposits are involved.

The proceeds from the liquidation of the company’s assets are as follows:

Current assets $9,425,000 Land and buildings 3,045,000 Equipment 4,130,000 Total $16,600,000