The balance sheet of Natathon International is as follows:

Although the balance sheet appears reasonably healthy, Natathon is on the verge of ceasing operations. Appraisers have estimated that, while current assets are worth $200,000, the fixed assets of the company can be sold for only $450,000. There are 1,000 outstanding shares of common stock owned by ten shareholders, each with a 10 percent interest (i.e., 100 shares). before ceasing operations, the board of directors, which is composed primarily of the major shareholders, is considering several alternative courses of action.
1. Liquidate the assets, declare a $250-per-share dividend, and distribute the remaining assets to the creditors.
2. Liquidate the assets, declare a 4400-per-share dividend, and distribute the remaining assets to the creditors.
3. Liquidate the assets, purchase the outstanding shares for $250 each, and distribute the remaining assets to the creditors.
4. Liquidate the assets, and purchase the outstanding shares for $650 each.
Required
(a) Prepare the journal entry to reflect the write-down of the flied assets.
(b) Prepare the journal entry to accompany each alternative course of action.
(c) Comment on the legality of each of the board's proposals, and explain how the assets should he distributed after liquidation.

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LIABILITIES AND SHAREHOLDERS' EQUITY ASSETS Current assets Liabilities Common stock Additional paid-in capital Retained earnings Total liabilities and S200,000 500,000 S400,000 150,000 Fixed assets 50,000 100,000 Total assets S700,000 shareholders' equity S700,000