On May 1, 2020, Rolly Industries begins liquidation activities and adopts the liquidation basis of accounting. The book...
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%.
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.
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On May 1, 2020, Rolly Industries begins liquidation activities and adopts the liquidation basis of accounting. The book...
On May 1, 2020, Rolly Industries begins liquidation activities and adopts the liquidation basis of accounting. The book...
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...
On May 1, 2020, Rolly Industries begins liquidation activities and adopts the liquidation basis of accounting....
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...
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