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	$1,200
Equipment	2,000
Receivables	44
Inventories	330
Total	$3,574

In addition, the firm had $5,000 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.

   $  

   What is the total of creditor and trustee claims? 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 your answers in thousands. For example, an answer of $1.2 thousand should be entered as 1.2, not 1,200. Do not round intermediate calculations. Round your answers to two decimal places.

   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