Liquidation Proceeds from sale of fixed assets Proceeds from sale of current assets Trustee's costs Any single worker due more than $2.000 in wagos? Any unfunded pension plan liabilities? $440,000 $230,000 $35,000 No No Balance Sheet: Current assets $400,000 Net fixed assets 600,000 Accounts payable Accrued taxes Accrued wages Notes payable Total current liabilities First-mortgage bonds Second-mortgage bonds Debentures Subordinated debentures ** Common stock Retained earnings Total claims $50,000 40.000 30.000 180.000 $300,000 300.000 200.000 200.000 100.000 50.000 - 150.000 $1,000,000 Total assets $1,000,000 Notes: * All fixed assets are pledged as collateral to the mortgage bonds. **Subordinated to notes payable only Distribution to Common Shareholders: Amount distributed to common shareholders Formulas #N/A $440,000 Distribution to Mortgage Bondholders: Proceeds from sale of fixed assets Less: First mortgage (paid from sale of fixed assets) Second mortgage (paid from sale of fixed assets) Total funds distributed to mortgage bondholders #N/A #NA $0 Funds available from fixed assets proceeds after distribution to bondholders $440,000 #N/A Distribution to Priority Claimants: Proceeds from sale of assets after distribution to mortgage bondholders Less: Fees and expenses of bankruptcy Wages due to workers within 3 months of bankruptcy Taxes due to federal, state, and local govemments Total funds distributed to priority claimants #NA #NA #N/A #N/A #N/A Funds available for distribution to general creditors Pro Rata Distribution Before Subordination Adjustment #N/A Distribution to General Creditors: Pro Rata Distribution Before Subordination Adjustment Total Amount Received Percentage of Original Claim Received Amount of Claim Distribution after Subordination Adjustment General Creditors' Claims Unsatisfied portion of first mortgage Accounts payable Notes payable (to banks) 50.000 $0 0 180,000 0 0 Second mortgage Debentures Subordinated debentures Total claims 200,000 100,000 $530,000 0 $0 Formulas Amount of Claim #N/A Distribution after Subordination Adjustment Total Amount Received #N/A General Creditors' Claims Unsatisfied portion of first mortgage Accounts payable Notes payable (to banks) Second mortgage Debentures Subordinated debentures Total claims Pro Rata Distribution Before Subordination Adjustment #N/A #N/A #N/A #N/A #N/A #N/A #N/A Percentage of Original Claim Received #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Excel Online Structured Activity: Liquidation At the time it defaulted on its interest payments and filed for bankruptcy, the McDaniel Mining Company had the balance sheet provided in the Microsoft Excel Online file below. The court, after trying unsuccessfully to reorganize the firm, decided that the only recourse was liquidation Sale of the fixed assets, which were pledged as collateral to the mortgage bondholders, brought in $440,000, while the current assets were sold for another $230,000. Thus, the total proceeds from the liquidation sale were $670,000. The trustee's costs amounted to $35,000; no single worker was due more than $2,000 in wages; and there were no unfunded pension plan liabilities. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. X Open spreadsheet a. How much will McDaniel's shareholders receive from the liquidation? If your answer is zero, enter "O". Round your answer to the nearest dollar. $ 0 b. How much will the mortgage bondholders receive? If your answer is zero, enter "0". Round your answer to the nearest dollar $ 0 c. How much will other priority claimants receive from the liquidation? Do not round intermediate calculations. Round your answers to the nearest dollar Claimant Amount Trustee's expenses 5 35000 Workers' wages due $ 30000 Governments taxes dues 40000 Total 5 105000 d. How much will the remaining general creditors receive from the distribution before subordination adjustment? If your answer is zero, enter "o". Do not round Intermediate calculations. Round your answers to the nearest dollar. Account Amount Received Accounts payable 30000 Notes payable $ 30000 Second mortgage bonds 5 40000 $ Debentures 30000 Q Search this Liquidation c. How much will other priority claimants receive from the liquidation? Do not round intermediate calculations. Round your answers to the nearest dollar. Claimant Amount Trustee's expenses $ 35000 Workers' wages due $ 30000 Governments taxes due $ 40000 Total $ 105000 d. How much will the remaining general creditors receive from the distribution before subordination adjustment? If your answer is zero, enter "0". Do not round intermediate calculations. Round your answers to the nearest dollar. Account Amount Received Accounts payable $ 30000 Notes payable 5 30000 Second mortgage bonds $ 40000 Debentures $ 30000 Subordinated $ 40000 debentures Total $ 520000 What is the effect of adjusting for subordination? If your answer is zer enter "0". Do not round intermediate calculations. Round your answers to the nearest doller, Amount Received after Account subordination adjustment Notes payable 0 Subordinated debentures 0 Check My Work Resel Problem Liquidation Proceeds from sale of fixed assets Proceeds from sale of current assets Trustee's costs Any single worker due more than $2.000 in wagos? Any unfunded pension plan liabilities? $440,000 $230,000 $35,000 No No Balance Sheet: Current assets $400,000 Net fixed assets 600,000 Accounts payable Accrued taxes Accrued wages Notes payable Total current liabilities First-mortgage bonds Second-mortgage bonds Debentures Subordinated debentures ** Common stock Retained earnings Total claims $50,000 40.000 30.000 180.000 $300,000 300.000 200.000 200.000 100.000 50.000 - 150.000 $1,000,000 Total assets $1,000,000 Notes: * All fixed assets are pledged as collateral to the mortgage bonds. **Subordinated to notes payable only Distribution to Common Shareholders: Amount distributed to common shareholders Formulas #N/A $440,000 Distribution to Mortgage Bondholders: Proceeds from sale of fixed assets Less: First mortgage (paid from sale of fixed assets) Second mortgage (paid from sale of fixed assets) Total funds distributed to mortgage bondholders #N/A #NA $0 Funds available from fixed assets proceeds after distribution to bondholders $440,000 #N/A Distribution to Priority Claimants: Proceeds from sale of assets after distribution to mortgage bondholders Less: Fees and expenses of bankruptcy Wages due to workers within 3 months of bankruptcy Taxes due to federal, state, and local govemments Total funds distributed to priority claimants #NA #NA #N/A #N/A #N/A Funds available for distribution to general creditors Pro Rata Distribution Before Subordination Adjustment #N/A Distribution to General Creditors: Pro Rata Distribution Before Subordination Adjustment Total Amount Received Percentage of Original Claim Received Amount of Claim Distribution after Subordination Adjustment General Creditors' Claims Unsatisfied portion of first mortgage Accounts payable Notes payable (to banks) 50.000 $0 0 180,000 0 0 Second mortgage Debentures Subordinated debentures Total claims 200,000 100,000 $530,000 0 $0 Formulas Amount of Claim #N/A Distribution after Subordination Adjustment Total Amount Received #N/A General Creditors' Claims Unsatisfied portion of first mortgage Accounts payable Notes payable (to banks) Second mortgage Debentures Subordinated debentures Total claims Pro Rata Distribution Before Subordination Adjustment #N/A #N/A #N/A #N/A #N/A #N/A #N/A Percentage of Original Claim Received #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Excel Online Structured Activity: Liquidation At the time it defaulted on its interest payments and filed for bankruptcy, the McDaniel Mining Company had the balance sheet provided in the Microsoft Excel Online file below. The court, after trying unsuccessfully to reorganize the firm, decided that the only recourse was liquidation Sale of the fixed assets, which were pledged as collateral to the mortgage bondholders, brought in $440,000, while the current assets were sold for another $230,000. Thus, the total proceeds from the liquidation sale were $670,000. The trustee's costs amounted to $35,000; no single worker was due more than $2,000 in wages; and there were no unfunded pension plan liabilities. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. X Open spreadsheet a. How much will McDaniel's shareholders receive from the liquidation? If your answer is zero, enter "O". Round your answer to the nearest dollar. $ 0 b. How much will the mortgage bondholders receive? If your answer is zero, enter "0". Round your answer to the nearest dollar $ 0 c. How much will other priority claimants receive from the liquidation? Do not round intermediate calculations. Round your answers to the nearest dollar Claimant Amount Trustee's expenses 5 35000 Workers' wages due $ 30000 Governments taxes dues 40000 Total 5 105000 d. How much will the remaining general creditors receive from the distribution before subordination adjustment? If your answer is zero, enter "o". Do not round Intermediate calculations. Round your answers to the nearest dollar. Account Amount Received Accounts payable 30000 Notes payable $ 30000 Second mortgage bonds 5 40000 $ Debentures 30000 Q Search this Liquidation c. How much will other priority claimants receive from the liquidation? Do not round intermediate calculations. Round your answers to the nearest dollar. Claimant Amount Trustee's expenses $ 35000 Workers' wages due $ 30000 Governments taxes due $ 40000 Total $ 105000 d. How much will the remaining general creditors receive from the distribution before subordination adjustment? If your answer is zero, enter "0". Do not round intermediate calculations. Round your answers to the nearest dollar. Account Amount Received Accounts payable $ 30000 Notes payable 5 30000 Second mortgage bonds $ 40000 Debentures $ 30000 Subordinated $ 40000 debentures Total $ 520000 What is the effect of adjusting for subordination? If your answer is zer enter "0". Do not round intermediate calculations. Round your answers to the nearest doller, Amount Received after Account subordination adjustment Notes payable 0 Subordinated debentures 0 Check My Work Resel