Step-1: Calculation of Avilable assets and liabilities: Cash 75000 Inventory 140000 Building 155000 370000 Accounts payable 205000 Note Payable 105000 Secured by Inventory Liabilities 35000 With priority Bond Payable 200000 Secured by Building 545000 Step-2: Determination od payment plan: Stage of Payment in case of bankruptcy 1 Liabilities with Priority 2 Secured Debt 3 Unsecured debt Step-3: Payment of debt with priority and secured debt Paid from Debt Cash Balance Debt Closing Cash Liabilities With Priority 35000 35000 0 40000 Paid from realisation of Inventory Closing Amount of Inventory Notes Payable 105000 105000 0 35000 Paid from realisation of Building Closing Amount of Building Bonds Payable 200000 155000 45000 0 Step-4:Calculation of remaining unsecured debt and Assets Unsecured Liabilities: Bonds Payable 45000 Accounts Payable 205000 Total 250000 Remaining Assets: Cash 40000 Realisation from Inventory 35000 Step-5: Calculation of proprtionate distribution: Proportionate distribution: Bonds Payable 75000*45/250 13500 Accounts Payable 75000*205/250 61500 75000 Step-6: Calculation of amount received by bond holders Payment to Bonds Holder: Secured part 155000 Unsecured Part 13500 Total 168500 Thus, holders of bond can expect tp receive $ 168,500 Solution Step-1: Calculation of Avilable assets and liabilities: Cash 75000 Inventory 140000 Building 155000 370000 Accounts payable 205000 Note Payable 105000 Secured by Inventory Liabilities 35000 With priority Bond Payable 200000 Secured by Building 545000 Step-2: Determination od payment plan: Stage of Payment in case of bankruptcy 1 Liabilities with Priority 2 Secured Debt 3 Unsecured debt Step-3: Payment of debt with priority and secured debt Paid from Debt Cash Balance Debt Closing Cash Liabilities With Priority 35000 35000 0 40000 Paid from realisation of Inventory Closing Amount of Inventory Notes Payable 105000 105000 0 35000 Paid from realisation of Building Closing Amount of Building Bonds Payable 200000 155000 45000 0 Step-4:Calculation of remaining unsecured debt and Assets Unsecured Liabilities: Bonds Payable 45000 Accounts Payable 205000 Total 250000 Remaining Assets: Cash 40000 Realisation from Inventory 35000 Step-5: Calculation of proprtionate distribution: Proportionate distribution: Bonds Payable 75000*45/250 13500 Accounts Payable 75000*205/250 61500 75000 Step-6: Calculation of amount received by bond holders Payment to Bonds Holder: Secured part 155000 Unsecured Part 13500 Total 168500 Thus, holders of bond can expect tp receive $ 168,500.