Quarter Staff is being liquidated under Chapter 7 of the bankruptcy code. When it filed for bankruptcy, its balance sheet (in millions) was as follows: $\begin{array}{lclr}\text { Assets }&&\text { Liabilities \& Capital }\
\text { Current assets } & \$ 14.9 & \text { Accounts payable } & \$ 4.6 \
\text { Land \& buildings } & 10 & \text { Accrued wages } & 0.1 \
\text { Equipment } & 6 & \text { Accrued taxes } & 0.4 \
\text { Total assets } & \$ 30.9 & \text { Notes payable } & 5.0\
&&\text { Mortgage bonds } & 5.2 \
&&\text { Stockholders' equity } & 15.6 \
&&\text { Total liabilities \& equity } & \$ 30.9
\end{array}$ ? The notes payable are an unsecured bank loan, and the mortgage bond is secured by the land and building. The proceeds from the liquidation of the company's assets are as follows: $$\begin{array} { l r }
\text { Current assets } & \$ 7.2 \
\text { Land \& buil ding } & 4.5 \
\text { Equipment } & { 2.1 } \
\text { Total } & \$ 13.8
\end{array}$$ ?
If the bankruptcy administration charges were $500,000, what dollar amount will the trade creditors (accounts payable) receive in the liquidation?

Question

Quarter Staff is being liquidated under Chapter 7 of the bankruptcy code. When it filed for bankruptcy, its balance sheet (in millions) was as follows: $\begin{array}{lclr}\text { Assets }&&\text { Liabilities \& Capital }\
\text { Current assets } & \$ 14.9 & \text { Accounts payable } & \$ 4.6 \
\text { Land \& buildings } & 10 & \text { Accrued wages } & 0.1 \
\text { Equipment } & 6 & \text { Accrued taxes } & 0.4 \
\text { Total assets } & \$ 30.9 & \text { Notes payable } & 5.0\
&&\text { Mortgage bonds } & 5.2 \
&&\text { Stockholders' equity } & 15.6 \
&&\text { Total liabilities \& equity } & \$ 30.9
\end{array}$ ? The notes payable are an unsecured bank loan, and the mortgage bond is secured by the land and building. The proceeds from the liquidation of the company's assets are as follows: $$\begin{array} { l r } 
\text { Current assets } & \$ 7.2 \
\text { Land \& buil ding } & 4.5 \
\text { Equipment } &  { 2.1 }  \
\text { Total } & \$ 13.8
\end{array}$$ ?
If the bankruptcy administration charges were $500,000, what dollar amount will the trade creditors (accounts payable) receive in the liquidation?

Quizplus · Accepted Answer

The Answer of Quarter Staff is being liquidated under Chapter 7 of the bankruptcy code. When it filed for bankruptcy, its balance sheet (in millions) was as follows: $\begin{array}{lclr}\text { Assets }&&\text { Liabilities \& Capital }\
\text { Current assets } & \$ 14.9 & \text { Accounts payable } & \$ 4.6 \
\text { Land \& buildings } & 10 & \text { Accrued wages } & 0.1 \
\text { Equipment } & 6 & \text { Accrued taxes } & 0.4 \
\text { Total assets } & \$ 30.9 & \text { Notes payable } & 5.0\
&&\text { Mortgage bonds } & 5.2 \
&&\text { Stockholders' equity } & 15.6 \
&&\text { Total liabilities \& equity } & \$ 30.9
\end{array}$ ? The notes payable are an unsecured bank loan, and the mortgage bond is secured by the land and building. The proceeds from the liquidation of the company's assets are as follows: $$\begin{array} { l r } 
\text { Current assets } & \$ 7.2 \
\text { Land \& buil ding } & 4.5 \
\text { Equipment } &  { 2.1 }  \
\text { Total } & \$ 13.8
\end{array}$$ ?
If the bankruptcy administration charges were $500,000, what dollar amount will the trade creditors (accounts payable) receive in the liquidation?

Quarter Staff Is Being Liquidated Under Chapter 7 of the Bankruptcy