25-4 Liquidation The following balance sheet represents Boles Electronics Corpora- tion's position at the time it filed for bankruptcy (in thousands o f dollars): 1,600 500 150 50 Total current assets 1,000 Total current liabilities 2,300 2,000 5,000 Subordinated debentures 2,500 debentures 2,500 Cash Receivables Inventories s 10 Accounts payable 100 Notes payable 890 Wages payable Taxes payable 4,000 Mortgage bonds Net plant Net equipment Preferred stock Common stock 1,500 1,700 $10,000 Total assets $10,000 Total claims The mortgage bonds are secured by the plant but not by the equipment. The subordinated debentures are subordinated to notes payable. The firm was unable to reorganize under Chapter 11; therefore, it was liquidated under Chapter 7