On May 1, 2020, Rolly Industries begins liquidation activities and adopts the liquidation basis of accounting. The book value of its reported assets total $700,000, including $10,000 in cash, and the book value of its liabilities, consisting of bank loans, total $600,000. Expected proceeds from reported assets other than cash are:

*	Receivables, $50,000
*	Inventories, $150,000
*	Plant and equipment, $300,000

Previously unreported identifiable intangible assets have a fair value of $80,000. Expected costs of liquidating assets are $20,000, and negotiations are in process to reduce Rolly's bank loans by 25%.

During the two months ending June 30, 2020, the following transactions occur:

*	Receivables of $48,000 are collected and the rest are determined to be uncollectible.
*	Inventories are sold for $100,000.
*	Plant and equipment is sold for $125,000.
*	The identifiable intangible assets are sold for $72,000.
*	Liquidation costs of $10,000 are paid.
*	Bank loans of $325,000 are paid, and creditors holding $275,000 of loans agree to accept $250,000 as full payment.
*	Fair values of remaining assets other than cash are:
*	Inventories, $55,000
*	Plant and equipment, $185,000
*	Estimated future liquidation costs are $6,000.

On the statement of net assets in liquidation at June 30, 2020, total liabilities are:

Select one: A. $256,000 B. $250,000 C. $264,000 D. $275,000

A company enters Chapter 7 bankruptcy proceedings. Its balance sheet, prepared using GAAP for a company with continuing operations, is as follows:

The plant and equipment is security for one of the loans, with a balance of $130,000. The other liabilities are unsecured. The following transactions occur:

*	Inventories with a book value of $60,000 were sold for $40,000.
*	The plant and equipment was sold for $200,000. The loan secured by the plant and equipment was paid.
*	Wages and administrative expenses of $10,000 were accrued.
*	An initial payment of 40 cents per dollar of indebtedness was paid to the unsecured creditors.

On the receiver's statement of estate deficit, the change in estate deficit is:

Select one: A. $(70,000) B. $(10,000) C. $(60,000) D. $(80,000)

90,000 300,000 100,000 Loans payable uity (deficit Plant and equipment, net $365,000 Total "(XX)