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At the time it defaulted on its interest payments and filed for bankruptcy, the McDaniel Mining Company had the balance sheet shown here (in thousands of dollars). The court, after trying unsuccessfully to reorganize the firm, decided that the only recourse was liquidation under Chapter 7. Sale of the fixed assets, which were pledged as collateral to the mortgage bondholders, brought in $400,000, while the current assets were sold for another $200,000. Thus, the total proceeds from the liquidation sale were $600,000. The trustee's costs amounted to $50,000; no single worker was due more than the maximum allowable wages per worker; and there were no unfunded pension plan liabilities. www Finance in a Dynamic Environment S ER 8 Current assets Net fixed assets Accrued taxes Accrued wages Notes payable Total current liabiliti First-mortgage bonds" Second-mortgage bonds Debentures Subordinated debentures Common stock Retained earnings Total claims 50 (150) $1,000 Total assets $1,000 Notes: "All fixed assets are pledged as collateral to the mortgage bonds. subordinated to notes payable only. a. How much will McDaniel's shareholders receive from the liquidation? b. How much will the mortgage bondholders receive? c. Who are the other priority claimants (in addition to the mortgage bondholders)? How much will they receive from the liquidation? d. Who are the remaining general creditors? How much will each receive from the distribution before subordination adjustment? What is the effect of adjusting for subordination

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