Please help me ! 24-6: Liquidation in BankruptcySouthwestern Wear Inc. has the following balance sheet:Current assetsFixed assets$1,875,000 Accounts payable1,875,000Notes payableSubordinated debenturesTotal debtCommon equity$3,750,000 Total liabilities & equityTotal assetsThe trustee's costs total $338,250, 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 andliquidates, how much will each class of investors receive if a total of $3.0 million is received from sale of the assets? Round your answers for monetary values to the nearest dollar and for percentage values to the nearestwhole number. If your answer is zero, enter "0". Enter your answers as positive values.Distribution of proceeds on liquidation:Proceeds from the sale of assetsLess:1. First mortgage (paid from the sale of fixed assets)2. Fees and expenses of bankruptcy3. Wages due to workers within 3 months of bankruptcy4. Taxes due to federal, state, and local governments5. Unfunded pension liabilitiesFunds available for distribution to general creditors$$ 375,000750,000750,000$$1,875,0001,875,000$3,750,000

General creditors refer to the creditors who lend money to the borrower but they don't have an…

Answered: 24-6: Liquidation in Bankruptcy…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter23: Corporate Restructuring

Section: Chapter Questions

Problem 6P

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