Liquidation At the time it defaulted on its interest payments and filed for bankruptcy, the McDaniel Mining Company had the balance sheet shown below (in thousands of dollars). The court, after trying unsuccessfully to reorganize 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 $420,000, while the current assets were sold for another $200,000. Thus, the total proceeds from the liquidation sale were $620,000. The trustee's costs amounted to $60,000; no single worker was due more than the maximum allowable wages per worker; and there were no unfunded pension plan liabilities. Balance Sheet (Thousands of Dollars) $ 400 600 Current assets Account payable 50 Net fixed assets Accrued taxes 40 Accrued wages 30 Notes payable 180 $ 300 Total current liabilities First-mortgage bonds Second-mortgage bonds 200 Debentures 200 Subordinated debenturesb 100 Common stock 50 Retained earnings (150) Total assets Total liabilities & equity $1,000 $1,000 Notes: All fixed assets are pledged as collateral to the mortgage bonds. bsubordinated to notes payable only. a. How much will McDaniel's shareholders receive from the liquidation? Write out your enswer completely. For exemple, 5 thousend dollar should be entered as 5,000. Round your enswer to the nearest dollar. If no entry is required, enter "o". b. How much will the first mortoage bondholders receive from colateralized assets? wil they receive their full claim7 If not, how much is ther remaining daim? Wnite out your answer completely. For example, 5 thousand dolar should be entered as 5,000. Round your answers to the nearest dollar. If no entry is required, enter "0". from colaterelized assets that is The frst mortgege bondhokders will receive $ equal to their full claim. Therefore, the first mortgage holders 300000 in unsatisfied claims. have $ c. How much wil the second mortgage bondhokders receive from oollateraized assets? Wil they receive their ful daim? If ot, how much is their remaining claim? Write out your answer completely. For example, S thousand doler should be entered as 5,000. Round your answers to the nearest dollar. If no entry is required, enter "o". from oollateraized assets that is not The second mortgage bondholders will receive $ 12000 equal to their ful daim. Therefore, the second mortgage holders have $ in unsatisfied daims. 0000 d. How much wil the other priority claimants (in addition to the mortgage bondholders) receive from the liquidation? Write out your answer completely. For example, 5 thousand doler should be entered es 5,000. Round your enswers to the nearest dollar. Remainging primary daimants Amount Trustee's expenses 60000 workers' wages due 30000 Govemments' texes due 40000 Total 130000 e. How much will the remaining general creditors receive from the distribution before subordination adjustment? Do not round intermediate calculations. Write out your answer completely. For example, 5 thousand dollar should be entered as 5,000. Round your answers to the nearest dollar. Amount Received before subordination adjustment Account Accounts payable 24 Notes payable %24 Second mortgage bonds Debentures 24 Subordinated debentures $4 Total How much will the remaining general creditors receive after subordination? Do not round intermediate calculations. Write out your answer completely. For example, 5 thousand dollar should be entered as 5,000. Round your answers to the nearest dollar. If no entry is required, enter "0". Liquidation At the time it defaulted on its interest payments and filed for bankruptcy, the McDaniel Mining Company had the balance sheet shown below (in thousands of dollars). The court, after trying unsuccessfully to reorganize 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 $420,000, while the current assets were sold for another $200,000. Thus, the total proceeds from the liquidation sale were $620,000. The trustee's costs amounted to $60,000; no single worker was due more than the maximum allowable wages per worker; and there were no unfunded pension plan liabilities. Balance Sheet (Thousands of Dollars) $ 400 600 Current assets Account payable 50 Net fixed assets Accrued taxes 40 Accrued wages 30 Notes payable 180 $ 300 Total current liabilities First-mortgage bonds Second-mortgage bonds 200 Debentures 200 Subordinated debenturesb 100 Common stock 50 Retained earnings (150) Total assets Total liabilities & equity $1,000 $1,000 Notes: All fixed assets are pledged as collateral to the mortgage bonds. bsubordinated to notes payable only. a. How much will McDaniel's shareholders receive from the liquidation? Write out your enswer completely. For exemple, 5 thousend dollar should be entered as 5,000. Round your enswer to the nearest dollar. If no entry is required, enter "o". b. How much will the first mortoage bondholders receive from colateralized assets? wil they receive their full claim7 If not, how much is ther remaining daim? Wnite out your answer completely. For example, 5 thousand dolar should be entered as 5,000. Round your answers to the nearest dollar. If no entry is required, enter "0". from colaterelized assets that is The frst mortgege bondhokders will receive $ equal to their full claim. Therefore, the first mortgage holders 300000 in unsatisfied claims. have $ c. How much wil the second mortgage bondhokders receive from oollateraized assets? Wil they receive their ful daim? If ot, how much is their remaining claim? Write out your answer completely. For example, S thousand doler should be entered as 5,000. Round your answers to the nearest dollar. If no entry is required, enter "o". from oollateraized assets that is not The second mortgage bondholders will receive $ 12000 equal to their ful daim. Therefore, the second mortgage holders have $ in unsatisfied daims. 0000 d. How much wil the other priority claimants (in addition to the mortgage bondholders) receive from the liquidation? Write out your answer completely. For example, 5 thousand doler should be entered es 5,000. Round your enswers to the nearest dollar. Remainging primary daimants Amount Trustee's expenses 60000 workers' wages due 30000 Govemments' texes due 40000 Total 130000 e. How much will the remaining general creditors receive from the distribution before subordination adjustment? Do not round intermediate calculations. Write out your answer completely. For example, 5 thousand dollar should be entered as 5,000. Round your answers to the nearest dollar. Amount Received before subordination adjustment Account Accounts payable 24 Notes payable %24 Second mortgage bonds Debentures 24 Subordinated debentures $4 Total How much will the remaining general creditors receive after subordination? Do not round intermediate calculations. Write out your answer completely. For example, 5 thousand dollar should be entered as 5,000. Round your answers to the nearest dollar. If no entry is required, enter "0