Question

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

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

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 $50,000, sold off the assets and received the following proceeds (in thousands of dollars):

Asset	Proceeds
Plant	$1,300
Equipment	2,800
Receivables	60
Inventories	400
Total	$4,560

In addition, the firm had $10,000 in cash available for distribution. No single wage earner had claims exceeding the maximum allowable wages per worker, and there were no unfunded pension plan liabilities.

1. What is the total amount available for distribution to all claimants? Round your answer to the nearest dollar. Enter your answer in dollars.
   $
   
   What is the total of creditor and trustee claims? Enter your answer in dollars. Round your answer to the nearest dollar.
   $
   
   Will the preferred and common stockholders receive any distributions?
   -Select-YesNoItem 3
   
2. Determine the dollar distribution to each creditor and to the trustee. What percentage of each claim is satisfied? Enter dollar amounts in thousands. For example, an answer of $1.2 thousand should be entered as 1.2, not 1,200. Round your answers to two decimal places. Do not round intermediate calculations.
   The liquidation distribution (in thousands of dollars):

   Claimant	Dollar Distribution	Percentage
   Accounts payable	$	%
   Notes payable	$	%
   Wages payable	$	%
   Taxes payable	$	%
   Mortgage bonds	$	%
   Subordinated Debentures	$	%
   Trustee	$	%

Answer 1

Answer to (a)

Total amount available for distribution to all claimants

Realizable value of assets

Particulars Amount (in Thousands)

Plant                                       $1,300.00

Equipment                            2,800.00

Receivables                                60.00

Inventory                                   400.00

Cash                                            10.00

Total                                         4570.00

Total of trustees and creditors claimed:-

Particulars Amount (in Thousands)

Account payable                  1600.00

Notes payable                      500.00

Wages payable                    150.00

Tax payable                          50.00

mortgage bond                    2000.00

Subordinate debenture      2500.00

Trustee claims                     50.00

Total                                       6850.00

• Since total recovery amount is less than total liability amount so   preferred and common stakeholder will not get any amount.