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Liquidation Basis of Accounting Farmworth Company entered liquidation on March 1 . The book value of its assets totaled $ 4 0 0 , 0
Liquidation Basis of Accounting
Farmworth Company entered liquidation on March The book value of its assets totaled $ including $ in cash, and the book value of its liabilities totaled $ Expected proceeds from reported assets other than cash were:
Receivables, $
Inventory, $
Plant and equipment, $
Expected costs of liquidating assets were $
During the three months ending June the company collected $ in receivables, sold inventory for $ and paid liquidation costs of $ Reported liabilities of $ were paid. At the end of three months, estimated valuations on remaining assets and liabilities are as follows:
Expected proceeds from reported assets other than cash are:
Receivables, $
Inventory, $
Plant and equipment, $
Newly identified unreported assets can be liquidated for an estimated $
Expected costs of liquidating assets are $
A creditor holding a loan with a book value of $ agrees to accept $ as full payment.
Required
a Prepare a statement of changes in net assets in liquidation as of June
Use negative signs with your answers, when appropriate.
Farmworth Company
Statement of Changes in Net Assets in Liquidation
For the Months Ending June
Net assets, March Answer
Remeasurement adjustments on assets:
Receivables Answer
Inventory Answer
Plant and equipment Answer
Items previously not recognized Answer
Remeasurement of liabilities Answer
Adjustment for accrued liquidation costs Answer
Net assets, June Answer
b Prepare a statement of net assets in liquidation as of June
Use a negative sign with your net assets answer, if appropriate.
Farmworth Company
Statement of Net Assets in Liquidation
June
Assets
Cash Answer
Receivables Answer
Inventory Answer
Plant and equipment Answer
Items not previously reported Answer
Total Assets Answer
Liabilities
Reported liabilities Answer
Accrued liquidation costs Answer
Total liabilities Answer
Net assets Answer
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Partially correct
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