Kent Co. filed a voluntary bankruptcy petition on August 15, 2006, and the statement of affairs reflects the following amounts:
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Book value |
Estimated current value |
||
Assets |
|||
Assets pledged with fully secured creditors |
$ |
300,000 |
$370,000 |
Assets pledged with partially secured creditors |
180,000 |
120,000 |
|
Free assets |
420,000 |
320,000 |
|
$ |
900,000 |
$810,000 |
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Liabilities |
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Liabilities with priority |
$ |
70,000 |
Fully secured creditors |
260,000 |
|
Partially secured creditors |
200,000 |
|
Unsecured creditors |
540,000 |
|
$ |
1,070,000 |
Assume that the assets are converted to cash at the estimated current values and the business is liquidated. What amount of cash will be available to pay unsecured nonpriority claims?
- $240,000
- $280,000
- $320,000
- $360,000