On March 1, 2020, Farmworth Company is entering liquidation. The book of its assets total $ 400,000, including $10,000 in cash, and the book value of its liabilities total $360,000. Additional information is as follows: 1. Expected proceeds from reported assets other than cash are :

• Receivables, $30,000
• Inventory, $ 70,000
• Plant and equipment, $ 175,000

2. Expected costs of liquidation assets are $25,000. Required.

a. Calculate the cumulative effect the adjustment to farmworth's net assets due to the adoption of the liquidation basis of according. Using a negative sign with your answer if the cumulative effect reduces net assets.

b. Prepare a statement of net assets in liquidation as of March 1, 2020. Use a negative sign with your net assets answer, if appropriate.

Assets Cash Receivables Inventory Plant and equipment Total assets Liabilities Reported liabilities Accrued liquidation cost Total liabilities Net assets Farmworth Company Statement of Net Assets in Liquidation March 1, 2020 S S $ $ S S $ S $ 50 $