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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

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 & equity

$3,750,000

The trustee's costs total $260,500, and the firm has no accrued taxes or wages. Southwestern has no unfunded pension liabilities. 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 $2.7 million is received from sale of the assets? Round your answers for monetary values to the nearest dollar and for percentage values to the nearest whole number. If your answer is zero, enter 0. Enter your answers as positive values.

Distribution of proceeds on liquidation:

Proceeds from the sale of assets

$

Less:

1. First mortgage (paid from the sale of fixed assets)

_______

2. Fees and expenses of bankruptcy

_______

3. Wages due to workers within 3 months of bankruptcy

_______

4. Taxes due to federal, state, and local governments

_______

5. Unfunded pension liabilities

Funds available for distribution to general creditors

$

Distribution to general creditors:

General Creditors' Claims (1)

Amount of Claim (2)

Application of 100% Distribution (3)

Distribution after Subordination Adjustment (4)

Percentage of Original Claim Received (5)

Accounts payable

$ ______

$ ___________

$_____

_____%

Notes payable

________

__________

_________

________

Subordinated debentures

_________

____________

___________

____________

Total

$

$

$

Round your answer for monetary value to the nearest dollar and for percentage value to two decimal places.

The remaining $ ______ will go to the common stockholders. They will receive only _______ % of the amount of equity on the balance sheet.

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