Question
Gemini Manufacturing Company was adjudged bankrupt on a petition of its creditors, and the trustee realized the following amounts from the sale of its business
Gemini Manufacturing Company was adjudged bankrupt on a petition of its creditors, and the trustee realized the following amounts from the sale of its business assets:
Cash in Bank$2 000
Accounts Receivable$65 000
Inventories$35 000
Land & Buildings$71 000
Total$173 000
Gemini's liabilities were as follows at the time of the receiving order (assume all secured creditors had taken the necessary steps to protect their security):
Bank loan secured under Section 427 of the bank act $30 000
Trade accounts payable$50 000
Municipal taxes payable ($3000/year)$9 000
Wages payable (4 months @ $2 500month for one employee) $10 000
First mortgage on land & Buildings$55 000
Second mortgage on land & buildings$30 000
Total$184 000
The liquidation expenses were $7 000 and the trustee fees were $4 000.
How much will each general creditor receive per dollar owed? Show all work including payments made to the various types of creditors.
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