LD Inc Declared Bankruptcy Through a Chapter 7 Filing

question 51

Multiple Choice

LD Inc. declared bankruptcy through a Chapter 7 filing. Consider the following data in millions of dollars and determine the funds available for secured creditors.
-Proceeds from the liquidation of assets = $225
-First mortgage = $50
-Administration expenses associated with the bankruptcy = $5
-Notes payable to the banks = $205
-Subordinated debentures = $350
-Taxes due to federal, state, and other governmental agencies = $17
-Wages due employees (2,000 employees) = $6

• A) $197
• B) $147
• C) $199
• D) $149

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Definitions:

Realities

The state of things as they actually exist, as opposed to how they may appear or might be imagined.

Entrepreneurs

Individuals who initiate, manage, and assume the risks of starting and running a new business venture.

Value Creation

The process of enhancing or producing goods, services, or ideas that have a higher worth to customers or stakeholders than the original cost of inputs.

Linear Process

A sequential process that follows a straight line or step-by-step progression where the output of one step becomes the input of the next step.