Sparkman Co

question 38

Multiple Choice

Sparkman Co. filed a bankruptcy petition and liquidated its noncash assets. Sparkman was paying forty cents on the dollar for unsecured claims. Bailey Co. held a mortgage of $150,000 on land that was sold for $110,000. The total amount of payment that Bailey should have received is calculated to be

• A) $110,000.
• B) $44,000.
• C) $126,000.
• D) $150,000.
• E) $60,000.
• Sale of land $110,000 + 40% of remaining $40,000 owed = $126,000