At the time it defaulted on its interest payments and filed for bankruptcy, the McDaniel Mining Company had the following balance sheet shown below (in thousands of dollars). The court, after trying efulu t ranize the firm, decided that the only recourse was liquidation under Chapter 7. Sale of the fixed assets, which were pledged as collateral to the mortgage bondholders, brought in 34u, wilIe e uurent assets were sold for another $300,000. Thus, the total proceeds from the liquidation sale were $640,000. The trustee's costs amounted to $45,000 no single worker was due more than the maximum allowable wages per worker; and there were no unfunded pension plan liabilities. Questions Navigation Menu 50 40 30 180 300 300 200 200 100 50 150 $1,000 $400 Account payable Current assets Net fixed assets 600 Accrued taxes Accrued wages Notes payable Total current liabilities First-mortgage bonds Second-mortgage bonds* Debentures Subordinated debentures* Common stock Retained earnings Total assets $1,000 Total claims Notes: "All fixed assets are pledged as collateral to the mortgage bonds. **Subordinated to notes payable only a. How much will McDaniel's shareholders receive from the liquidation? Round your answer to the nearest dollar b. How much will the mortgage bondholders receive? Round your answer to the nearest dollar. C. How much will other priority laimants receive from the liquidation? Round your answers to the nearest dollar. Do not round intermediate calculations. Claimant Trustee's expenses Workers' wages due Governments' taxes due Total Amount d. How much will the remaining general creditors receive from the distribution before subordination adjustment? Round your answers to the nearest dollar. Do not round intermediate calculations. Account Accounts payable Notes payable Second mortgage bonds Debentures Subordinated debentures Total Amount Received What is the effect of adjusting for subordination? Round your answers to the nearest dollar. Do not round intermediate calculations. Account Amount Received after subordination adjustment Notes payable Subordinated debentures At the time it defaulted on its interest payments and filed for bankruptcy, the McDaniel Mining Company had the following balance sheet shown below (in thousands of dollars). The court, after trying efulu t ranize the firm, decided that the only recourse was liquidation under Chapter 7. Sale of the fixed assets, which were pledged as collateral to the mortgage bondholders, brought in 34u, wilIe e uurent assets were sold for another $300,000. Thus, the total proceeds from the liquidation sale were $640,000. The trustee's costs amounted to $45,000 no single worker was due more than the maximum allowable wages per worker; and there were no unfunded pension plan liabilities. Questions Navigation Menu 50 40 30 180 300 300 200 200 100 50 150 $1,000 $400 Account payable Current assets Net fixed assets 600 Accrued taxes Accrued wages Notes payable Total current liabilities First-mortgage bonds Second-mortgage bonds* Debentures Subordinated debentures* Common stock Retained earnings Total assets $1,000 Total claims Notes: "All fixed assets are pledged as collateral to the mortgage bonds. **Subordinated to notes payable only a. How much will McDaniel's shareholders receive from the liquidation? Round your answer to the nearest dollar b. How much will the mortgage bondholders receive? Round your answer to the nearest dollar. C. How much will other priority laimants receive from the liquidation? Round your answers to the nearest dollar. Do not round intermediate calculations. Claimant Trustee's expenses Workers' wages due Governments' taxes due Total Amount d. How much will the remaining general creditors receive from the distribution before subordination adjustment? Round your answers to the nearest dollar. Do not round intermediate calculations. Account Accounts payable Notes payable Second mortgage bonds Debentures Subordinated debentures Total Amount Received What is the effect of adjusting for subordination? Round your answers to the nearest dollar. Do not round intermediate calculations. Account Amount Received after subordination adjustment Notes payable Subordinated debentures
