Acme Co. purchased a new building for $850,000. To do so, it borrowed $450,000 from Shapiro Limited and gave Shapiro a first mortgage on the building. Acme also borrowed $400,000 from Basco Limited and gave Basco a second mortgage. Both mortgages were duly registered. Acme later went into bankruptcy. The trustee in bankruptcy realized the following amounts from the sale of its business assets and the outstanding liabilities at that time of bankruptcy. Acme Co. - Bankruptcy Situation #1 ASSETS LIABILITIES Building $600,000 1st mortgage: Shapiro $400,000 Machinery $100,000 2nd mortgage: Basco $280,000 Equipment Supplies $60,000 Johnson Limited $220,000 $40,000 South Limited $100,000 Total Assets $800,000 Total Liabilites $1,000,000 Acme Co. Bankruptcy Situation #1 (1 mark each, total 15 marks items underlined) Secured Creditors Amount Owed: Amount Available: The payments to secured creditors first would be as follows: Name Dollar Amount Creditor 1 Creditor 2 Unsecured Creditors Amount Owed: Amount Available: How many cents on the dollar should the general unsecured creditors receive? on the dollar The payments to general (unsecured) creditors Name Dollar Amount would be as follows: Creditor 3 Creditor 4 Creditor 5