Question
24-1 - Southwestern Wear Inc. has the following balance sheet: Currents $1,875,000 Fixed assets 1,875,000 Total assets $3,750,000 Accounts payable $375,000 Notes Payble 750,000 Subordinated
24-1 - Southwestern Wear Inc. has the following balance sheet:
Currents $1,875,000
Fixed assets 1,875,000
Total assets $3,750,000
Accounts payable $375,000
Notes Payble 750,000
Subordinated debentures 750,000
Total debt $1,875,000
Common equity $1,875,000
Total liabilities and equity $3,750,000
The trustee's cost total $281,250, and the firm has no accrued taxes or wages. The debentures are subordinated only to the notes payable. If the firm goes bankrupt and liquidates, how much will each class of investors receive if a total of $2.5 million is received from sale of the assets?
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