Trifecta Inc. went bankrupt and the Court appointed a Licensed Insolvency Trustee to liquidate the estate of the bankrupt company. The Trustee has taken the necessary steps to identify the assets of the bankrupt estate, take control and possession of them, and value them. He has also identified all of the creditors and has ascertained the amounts owed to each of them. He is now being asked for a report by the Inspectors who want to get his assessment of what will be recovered by each of the creditors. He reported as set out below. He also reported that the liquidation expenses were $10,000 and his fees were $6,000 and the Superintendent's levy was $4,000. 

Assets Cash in Bank.........................................................................$ 25,000

Accounts Receivable............................................................. 75,000

Inventories of Finished Product .......................................... 31,000

Raw materials........................................................................ 30,000

Equipment.............................................................................. 50,000

Land and Buildings............................................................. 200,000

Total Value of Assets........................................................$ 411,000

Liabilities TD Bank (secured by s.427 Bank Act)................................ $ 200,000

Trade Accounts Payable....................................................... 406,000

Municipal Taxes Payable (four years)................................... 20,000

Wages Payable (to 5 employees for 8 months work)......... 80,000

Zoom Lenders Corp.

(secured by a first mortgage on land and buildings)........ 150,000

The Loansharks Ltd.

(secured by second mortgage on land and buildings)....... 75,000

Total of Liabilities............................................................. $ 931,000

Read the fact situation set out above and :

a. Complete the bankruptcy distribution calculation. In particular, name the creditors in the order in which they will be paid by the Trustee and the amount they will each receive. Show your work.

b. How much will the general creditors receive pro rata (ie. the fraction or percentage of a dollar creditors will receive for every dollar owed)? Show your work.

The order of priority goes as follows

1.Funeral expenses in the case of a deceased bankrupt;

2.Trustee's fees and expenses;

3.Bankruptcy Superintendent's levy;

4.Wages - amounts up to six months' wages not to exceed $2000 per person that are not already covered as a secured creditor;

5.Spousal and child support arrears- any lump sums owing and up to one year's periodic payments;

6.Municipal taxes - up to two years;

7.Rent - up to three months' arrears + 3 months accelerated rent if the lease provides for it;

8.Costs of the first creditor to initiate the bankruptcy proceedings;

9.Worker's compensation payments; 10.All government payroll deductions

Please input all calculations usin the following formatted chart

			Value of Assets
	Amount Owed	Amount Paid
Secured Creditors:
Preferred Creditors:
General Creditors: