Question 5. (20 points) Cambria, Inc. is being liquidated under Chapter 7 of the Bankruptcy Act. Its current balance sheet is shown below. Fixed assets are sold for $40,000,000 and current assets are sold for $10,000,000. All fixed assets are pledged as collateral for all mortgage bonds. Subordinated debentures are subordinate only to notes payable. Trustee costs are $1,000,000. No employee is owed over $2,000.

a. How much will SHs receive?

b. How much will mortgage bondholders receive?

c. How much will priority creditors receive?

d. Identify the remaining general creditors. How much will each receive before subordination adjustment?

e. How much will each of the general creditors receive after subordination adjustment?

Alignment Font Number Cells ard Styles Editing X fix Unsatisfied Second Mortgage B D E Before Before Default Balance Sheet Default Current Assets 45,000,000 Accounts payable 15,000,000 Net fixed assets 85,000,000 Accrued taxes 10,000 Accrued wages 550,000 Notes payable 3,800,000 8 Total current liabilities 19,360,000 9 18,000,000 First-mortgage bonds Second-mortgage bonds 20 25,000,000 21 Debentures 45,000,000 22 Subordinated debentures 14,000,000 23 Common stock 2,500,000 24 Retained earnings 6,140,000 25 Total assets 130,000,000 Total claims 130,000,000 26 Q1 02 Q3 04 Q5 Q6 + READY 130N