J&J Inc Declared Bankruptcy Through a Chapter 7 Filing

question 48

Multiple Choice

J&J 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 = $130
-First mortgage = $100
-Administration expenses associated with the bankruptcy = $3
-Notes payable to the banks = $25
-Subordinated debentures = $5
-Taxes due to federal, state, and other governmental agencies = $1
-Wages due employees (8,500 employees) = $18

• A) $79
• B) $84
• C) $109
• D) $0

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