1). Show how the available cash will be distributed in final liquidation of the corporation.

Fab is being liquidated under Chapter 7 of the bankruptcy act. All assets have been converted into cash, and $374,500 cash is available to pay the following claims: 6 1. Administrative expenses of preserving and liquidating the debtor $12,500 corporation's esta 2. Merchandise creditors 3. Local government for property taxes 4. Local bank for unsecured loan (principal is $30,000 and interest is 99,000 4,000 34,500 $4,500) 5. State government for gross receipts taxes 6. Employees for unpaid wages during the month before filing 3,000 48,000 5 (includes S13,025 for the company president and less than $12,475 for each of the other employees) Customers for prepaid merchandise that was not delivered Holders of the first mortgage on the company's real estate that was sold for $240,000 (includes $220,000 principal and $8,500 interest) 7. 8. 228,500 Assume that all the claims are allowed and that they were timely filed