Hello. I need help with this question please. I have attached the screenshot. b. If total liquidation proceeds are $7.975 million, what is the distribution of these proceeds among the various creditors of Failures Galore? Round your answers to the nearest dollar.Accounts payableBank notes payableMortgage bondsDebenturesSubordinated debenturesSettlement,(After Subordination Adjustment)$$$$$$Funds available for preferred and common stockholders: $ Consider Failures Galore Inc using the following tables:Balance Sheet, Failures Galore, Inc.*AssetsCurrent assetsFixed assets, net$$6,500,0007,000,0001. Bankruptcy administration expenses2. Wages owed to employees3. Taxes owed to governmentsAccounts payableBank notes payableMortgage bondsDebenturesSubordinated debenturesLiabilities and EquityAccounts payableTotal assets13,500,000*The subordinated debentures are subordinate to the bank notes payable. Assume thatall the accrued wages can be paid out of the liquidation proceeds.Total Claim$2,000,0002,000,000500,0002,000,0002,000,000Bank notes payableAccrued wagesAccrued taxesMortgage bondsDebenturesSubordinateddebenturesPreferred stockCommon equityLiabilities and equity $Distribution of the Proceeds from the Liquidation of Failures Galore, Inc.Total liquidation proceedsAccounts payableBank notes payableMortgage bondsDebenturesSubordinated debentures$6,700,000$450,000200,000300,000Total priority claims$950,000Funds available for claims of creditors$5,750,0004. Payment to mortgage bondholders (proceeds from sale of secured assets) 1,500,000Funds available for claims of general and unsecured creditors$4,250,000Settlement percentage for general and unsecured creditors$Settlement,50% of Claim(Before SubordinationAdjustment)$1,000,0001,000,000250,0001,000,0001,000,000$4,250,000= 4,250,0008,500,000= 50%$$$$S2,000,0002,000,000200,000Funds available for general and unsecured creditorsTotal claims of general and unsecured creditors300,0002,000,0002,000,0002,000,000$0Settlement,(After Subordination Adjustment)1,500,0001,500,00013,500,000$Funds available for preferred and common stockholders: $$8,500,000Funds available for preferred and common stockholdersa. If total liquidation proceeds are $5.425 million, what is the distribution of these proceeds among the various creditors of Failures Galore? Round your answers to the nearest dollar.Settlement,50% of Claim(After SubordinationAdjustment)$1,000,0002,000,000250,0001,000,0000$4,250,000

a. If total liquidation proceeds are $5.425 million, what is the distribution of these proceeds among the various creditors of Failures Galore? Round your answers to the nearest dollar. Settlement, (After Subordination Adjustment) Accounts payable Bank notes payable $ $ $ $ $ Funds available for preferred and common stockholders: $ Mortgage bonds Debentures Subordinated debentures

a. If total liquidation proceeds are $5.425 million, what is the distribution of these proceeds among the various creditors of Failures Galore? Round your answers to the nearest dollar. Settlement, (After Subordination Adjustment) Accounts payable Bank notes payable $ $ $ $ $ Funds available for preferred and common stockholders: $ Mortgage bonds Debentures Subordinated debentures

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter23: Corporate Restructuring

Section: Chapter Questions

Problem 5P

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