The following balance sheet represents Boles Electronics Corporation's position at the time it filed for bankruptcy (in thousands of dollars):

The mortgage bonds are secured by the plant, but not by the equipment. The subordinated debentures are subordinated to notes payable. The firm was unable to reorganize under Chapter 11; therefore, it was liquidated under Chapter 7. The trustee, whose legal and administrative fees amounted to $200,000, sold off the assets and received the following proceeds (in thousands of dollars):

Asset Proceeds

Plant $1,600

Equipment1,300

Receivables 50

Inventories 240

Total $3,190

In addition, the firm had $10,000 in cash available for distribution. No single wage earner had over $2,000 in claims, and there were no unfunded pension plan liabilities.

a. What is the total amount available for distribution to all claimants? What is the total of creditor and trustee claims? Will the preferred and common stockholders receive any distributions?

b. Determine the dollar distribution to each creditor and to the trustee. What percentage of each claim is satisfied?

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$ 1,600 Cash Accounts payable Notes payable Wages payable Taxes payable Total current liabilities 10 Receivables 100 500 Inventories 890 150 50 $ 2,300 Total current assets $ 1,000 Net plant Net equipment 4,000 Mortgage bonds Subordinated debentures 2,000 5,000 2,500 Preferred stock 1,500 Common stock 1,700 $10,000 Total assets $10,000 Total claims %24