Hartman Inc.,is liquidating.The company owes $3,800 to creditors of which $2,300 is unsubordinated debentures and $1,500 is subordinated debentures,preferred stockholders with a liquidating value of $1,800,and common stockholders.If Hartman,Inc.,has cash proceeds of $6,000,how much of the proceeds do the common stockholders receive?

Question

Quizplus · Accepted Answer

After paying the unsubordinated debentures ($2,300) and subordinated debentures ($1,500), $2,200 remains. Preferred stockholders are paid next, receiving $1,800, leaving $400 for common stockholders.