Duchon Industries had the following balance sheet at the time it defaulted on it

Question

Duchon Industries had the following balance sheet at the time it defaulted on its interest payments and filed for liquidation under Chapter 7. Sale of the fixed assets, which were pledged as collateral to the mortgage bondholders, brought in $900 million, while the current assets were sold for another $400 million. Thus, the total proceeds from the liquidation sales were $1,300 million. Trustee's costs amounted to $1 million; no single worker was due more than $2,000 in wages; and there were no unfunded pension plan liabilities. Determine the amount available for distribution to all claimants.

If possible please provide excel formulas, this is merely for understanding the question further.

Balance Sheets (Millions of Dollars) Assets Current assets $700 Net fixed assets 1,300 Total assets $2,000 Liabilities and equity Accounts payable $80 Accrued taxes 80 Accrued wages 70 Notes payable 400    Total current liabilities $630 First-mortgage bondsa 700 Second-mortgage bondsa 300 Debentures 500 Subordinated debenturesb 200 Common stock 100 Retained Earnings (430) Total claims $2,000 a All fixed assets are pledged as collateral to the mortgage bonds. b Subordinated to notes payable only. Other inputs (in thousands of dollars): Proceeds from sale of fixed assets = $900 Proceeds from sale of current assets = $401 Trustee's costs = $1 Total claims (including trustee expenses) $2,001 Total cash from liquidation $1,301 Amount available for distribution to shareholders Initital Distribution to Priority Claimants Priority claims: Trustee's expenses Worker's wages due $70 Government taxes due Distribution to first mortgage (paid from sale of fixed assets) Remaining proceeds from sale of fixed assets after satisfying first mortgage holders Distribution to second mortgage (paid from sale of fixed assets after satisfying first mortgage holders) Remaining proceeds from sale of fixed assets after satisfying first and second mortgage holders Total preliminary distributions to priority claimaints Total of satisfied priority claims Total unsastified claims from all claimants Funds available for distribution to general creditors: Pro rata distribution percentage Distributions due to general claims: Distribution after Subordination Adjustment Remaining Unsatisfied Claim Amount of Claim Pro Rata Distribution Subordination Adjustment Unsatisfied first mortgage Unsatisfied second mortgage Accounts payable Notes payable Debentures Subordinated debentures Total Total distributions (including prior distributions to mortgage holders and subordination adjustment): Percent of Claim Satisfied Total Distribution Original Claim First mortgage $700 Second mortgage $300 Accounts payable $80 Notes payable $400 Debentures $500 Subordinated debentures $200

Explanation / Answer

Proceeds from sale of fixed assets = $900 Proceeds from sale of current assets = $401 Trustee's costs = $1 Total claims (including trustee expenses) $2,331 Due to negative balance of shareholders equity Total cash from liquidation $1,301 Amount available for distribution to shareholders $0 Initital Distribution to Priority Claimants Priority claims: Trustee's expenses $1 Worker's wages due $70 Government taxes due $80 Distribution to first mortgage (paid from sale of fixed assets) $700 Remaining proceeds from sale of fixed assets after satisfying first mortgage holders $200 Distribution to second mortgage (paid from sale of fixed assets after satisfying first mortgage holders) $200 $200 Remaining proceeds from sale of fixed assets after satisfying first and second mortgage holders $0 Total preliminary distributions to priority claimaints $1,051 Total of satisfied priority claims $1,051 Total unsastified claims from all claimants $1,280 Funds available for distribution to general creditors: $250 Pro rata distribution percentage 19.5% Distributions due to general claims: Distribution after Subordination Adjustment Remaining Unsatisfied Claim Amount of Claim Pro Rata Distribution Subordination Adjustment Unsatisfied first mortgage $0 $0.00 $0.00 $0 Unsatisfied second mortgage $100 $19.53 $80.47 $20 Accounts payable $80 $15.63 $64.38 $16 Notes payable $400 $78.13 $321.88 $39.06 $117 Debentures $500 $97.66 $402.34 $98 Subordinated debentures $200 $39.06 $160.94 -$39.06 $0 Total $1,280 $250 Total distributions (including prior distributions to mortgage holders and subordination adjustment): Percent of Claim Satisfied Total Distribution Original Claim First mortgage $700.00 $700 100% Second mortgage $219.53 $300 73% Accounts payable $15.63 $80 20% Notes payable $117.19 $400 29% Debentures $97.66 $500 20% Subordinated debentures $0.00 $200 0%

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