$ Consider Failures Galore Inc using the following tables: Balance Sheet, Failures Galore, Inc.* Assets Liabilities and Equity Current assets $ 10,400,000 Accounts payable $ 3,000,000 Fixed assets, net 10,500,000 Bank notes payable 3,000,000 Accrued wages 400,000 Accrued taxes 500,000 Mortgage bonds 3,000,000 Debentures 3,000,000 Subordinated 3,000,000 debentures Preferred stock 2,500,000 Common equity 2,500,000 Total assets $ 20,900,000 Liabilities and equity 20,900,000 *The subordinated debentures are subordinate to the bank notes payable. Assume that all the accrued wages can be paid out of the liquidation proceeds. Distribution of the Proceeds from the Liquidation of Failures Galore, Inc. Total liquidation proceeds $8,610,000 1. Bankruptcy administration expenses $450,000 2. Wages owed to employees 400,000 3. Taxes owed to governments 500,000 Total priority claims $1,350,000 Funds available for claims of creditors $7,260,000 4. Payment to mortgage bondholders (proceeds from sale of secured assets) 2,100,000 Funds available for claims of general and unsecured creditors $5,160,000 Settlement percentage for general and unsecured creditors Funds available for general and unsecured creditore Total claims of general and unsecured creditors 5,160,000 12,900,000 = =40% home. Try improved features and snip like usual with S & Sketch (or try the shortcut Windows logo key + Shift +S). Try Snip & Sketch Settlement, 40% of Claim (Before Subordination Total Claim Adjustment) Accounts payable $ 3,000,000 $1,200,000 Bank notes payable 3,000,000 1,200,000 Mortgage bonds 900,000 360,000 Debentures 3,000,000 1,200,000 Subordinated debentures 3,000,000 1,200,000 $12,900,000 $5,160,000 Funds available for preferred and common stockholders $0 Settlement, 40% of Claim (After Subordination Adjustment) $1,200,000 2,400,000 360,000 1,200,000 0 $5,160,000 a. If total liquidation proceeds are $7.32 million, what is the distribution of these proceeds among the various creditors of Failures Galore? Round your answers to the nearest dollar. Settlement, (After Subordination Adjustment) Accounts payable Bank notes payable Mortgage bonds Debentures Subordinated debentures $ $ $ $ $ Funds available for preferred and common stockholders: $ b. If total liquidation proceeds are $9.9 million, what is the distribution of these proceeds among the various creditors of Failures Galore? Round your answers to the nearest dollar. Settlement, (After Subordination Adjustment) $ $ Accounts payable Bank notes payable Mortgage bonds Debentures Subordinated debentures $ $ $ Funds available for preferred and common stockholders: $