FM11_Ch_24_P04_Build_a_Model

FM11_Ch_24_P04_Build_a_Model - 8/4/2003 Chapter 24. Ch 24-4...

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8/4/2003 Chapter 24. Ch 24-4 Build a Model Assets Current assets $400 Net fixed assets 600 Total assets $1,000 Liabilities and equity Accounts payable $50 Accrued taxes 40 Accrued wages 30 Notes payable 180 Total current liabilities $300 300 200 Debentures 200 100 Common stock 50 Retained Earnings (150) Total claims $1,000 Other inputs (in thousands of dollars): Proceeds from sale of fixed assets = $450 Proceeds from sale of current assets = $250 Trustee's costs = $50 Total claims (including trustee expenses) At the time it defaulted on its interest payments and filed for bankruptcy, the McDaniel Mining Company had the following balance sheet (in thousands of dollars). The court, after trying unsuccessfully to reorganize the firm, decided that the only recourse was liquidation under Chapter 7. Sale of the fixed assets, which were pledged as collateral to the mortgage bondholders, brought in $450,000, while the current assets were sold for another $250,000. Thus, the total proceeds from the liquidation sales were $600,000. Trustee's costs amounted to $50,000;
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FM11_Ch_24_P04_Build_a_Model - 8/4/2003 Chapter 24. Ch 24-4...

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