Olds Company declares Chapter 7 bankruptcy. The following are the accounts at that time; administrative expenses are estimated to be $12,000:
|
Cash |
$24,000 |
|
|
Accounts receivable |
60,000 |
(worth $28,000) |
|
Inventory |
70,000 |
(worth $56,000) |
|
Land (secures note A) |
200,000 |
(worth $160,000) |
|
Building (secures bonds) |
400,000 |
(worth $320,000) |
|
Equipment |
120,000 |
(worth unknown) |
|
Accounts payable |
180,000 |
|
|
Taxes payable to government |
20,000 |
|
|
Note payable A |
170,000 |
|
|
Note payable B |
250,000 |
|
|
Bonds payable |
300,000 |
The holders of note payable B want to collect at least $125,000. To achieve that goal, how much does the company have to receive in the liquidation of its equipment?