Problem

Creditors of Jones Corporation are considering petitioning the courts to force the company...

Creditors of Jones Corporation are considering petitioning the courts to force the company into Chapter 7 bankruptcy. The following information has been determined. Administrative expenses in connection with the liquidation are estimated to be $22,000. Indicate the amount of money that each class of creditors can anticipate receiving.

 

Book Value

Net Realizable Value

Cash

$ 6,000

$ 6,000

Accounts receivable

32,000

18,000

Inventory

45,000

31,000

Supplies

3,000

-0-

Investments

$ 2,000

$ 8,000

Land

60,000

72,000

 

 

 

Buildings

90,000

68,000

Equipment

50,000

35,000

 

 

 

Notes payable (secured by land)

65,000

 

Notes payable (secured by buildings)

78,000

 

 

 

 

Bonds payable (secured by equipment)

115,000

 

 

 

 

Accounts payable

70,000

 

Salaries payable (two weeks' salary for three employees)

6,000

 

 

 

Taxes payable

10,000

 

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