Financial reporting during bankruptcy—Distributions to creditors
Hol is in bankruptcy and is being liquidated by a court appointed trustee. The financial report that follows was prepared by the trustee just before the final cash distribution:
|
Assets |
|
|
Cash |
$ 200,000 |
|
Approved Claims |
|
|
Mortgage payable (secured by property that was |
|
|
sold for $100,000) |
$ 160,000 |
|
Accounts payable, unsecured |
100,000 |
|
Administrative expenses payable, unsecured |
16,000 |
|
Salaries payable, unsecured |
4,000 |
|
Interest payable, unsecured |
20,000 |
|
Total approved claims |
$ 300,000 |
The administrative expenses are for trustee fees and other costs of administering the debtor corporation’s estate.
REQUIRED: Show how the $200,000 cash will be distributed to holders of each of the claims.