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 Rollys bank loans by 25%.

1. The May 1, 2020 statement of net assets in liquidation reports total assets in the amount of:

a. $710,000.

b. $590,000.

c. $510,000.

d. $500,000.

2. The May 1, 2020 statement of net assets in liquidation reports total liabilities in the amount of:

a. $600,000.

b. $450,000.

c. $620,000.

d. $470,000.