Bankruptcy Calculations

Faced with an inability to meet its current debt payments, The Selbert Company entered bankruptcy on April $30.$ The appointed trustee will liquidate the company and pay the creditors in accordance with the provisions of the bankruptcy laws. Selbert$$s balance sheet on April $30,$ following normal GAAP, shows the following:

THE SELBERT COMPANY

Balance Sheet

April $30$

Assets Liabilities and equity

Cash $$3,200$ Accounts payable $$132,000$

Accounts receivable $71,000$ Loan payable to bank $52,000$

Notes receivable $50,000$ Notes payable to suppliers $85,000$

Inventories $108,600$ Accrued wages $80,000$

Prepaid expenses $45,200$ Accrued taxes $25,000$

Land and buildings, net $172,000$ Mortgage payable $195,000$

Equipment, net $113,500$ Common stock $100,000$

Goodwill, net $0$ Retained earnings $(105,500)$

Total assets $$563,500$ Total liabilities and equity $$563,500$

Additional information:

$1.$ The trustee estimates that $50$ percent of the accounts receivable will be collected, and she has agreed to settle the notes receivable for $$40,000.$ The notes receivable serve as collateral for the loan payable to the bank.

$2.$ The inventories will likely be sold to a competitor, at $35$ percent of book value.

$3.$ Other than a $$2,500$ insurance refund, no recovery of prepaid items is expected.

$4.$ Appraised at $$265,000,$ the land and buildings are pledged as security on the mortgage.

$5.$ The equipment is expected to be sold for $$50,000.$

$6.$ The notes payable to the suppliers are unsecured.

$7.$ Accrued wages do not exceed statutory limits per employee.

Required

Compute the following:

a$.$ Estimated net loss on asset dispositions.

Do not use a negative sign with your answer.

$Answer

b$.$ Amount of priority claims.

$Answer

c$.$ Estimated payments to fully and partially secured creditors.

$Answer

d$.$ Expected recovery percentage to unsecured creditors.

Round answer to one decimal place $($ex: $0\mathrm{.}2345=23\mathrm{.}5\%).$

Answer$\%$