Reference no: EM132787198

The statement of affairs of Darrell Putix Co. indicates that unsecured creditors without priority with total claims of ?720,000 may expect to recover only ?288,000 after all the assets were sold. Among the creditors of Darrell Putix Co. are the following:

• Government - taxes payable of ?400,000, inclusive of ?80,000 assessments and surcharges.
• XYZ bank - loan payable of ?4,000,000 and accrued interest of ?200,000, backed by collateral security with realizable value of ?4,800,000.
• Alpha Financing Co. - loan payable of ?3,200,000 backed by collateral security with realizable value of ?2,000,000. 
• Mr. Bombay - loan payable of ?1,000,000 and accrued interest of ?200,000. No collateral security.

Problem 1: How much is the expected recovery of partially secured creditors?

a. 1,280,000
b. 2,480,000
c. 2,160,000
d. 0