Southwestern Wear Inc. has the following balance sheet:

Current assets $1,875,000 Accounts payable $375,000

Fixed Assets 1,875,000 Notes Payable 750,000

Subordinated debentures 750,000

Total debt 1,875,000

Common Equity 1,875,000

Total Assets 3,750,000 Total liabilities and equity $3,750,000

The trustees cost total $238,500 and the firm has no accrued taxes or wages. The debentures are subordinated only to the notes payable.

If the firm goes bankrupt and liquidates, how much will each class of investors receive if a total of $3 million is received form sale of the assets?

Distribution to general creditors:

Claims of General Creditors

(1)What is Claim

Notes payable amount: $

Accounts payable amount: $

Subordinated debentures amount: $

Total amount: $

(2)What is Application of 100% Distribution

Notes payable amount: $

Accounts payable amount: $

Subordinated debentures amount: $

Total amount: $

(3)What is After Subordination Adjustment

Notes payable amount: $

Accounts payable amount: $

Subordinated debentures amount: $

Total: $

(4)What is Percentage of Original Claims Received

Notes payable amount: $

Accounts payable amount: $

Subordinated debentures amount: $

Total amount: $