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On March 1, Farmworth Company is entering liquidation. The book value of its assets total...

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Accounting

On March 1, Farmworth Company is entering liquidation. The book value of its assets total $400,000, including $10,000 in cash, and the book value of its liabilities total $360,000. Additional information is as follows:1. Expected proceeds from reported assets other than cash are:- Receivables, $30,000- Inventory, $70,000- Plant and equipment, $175.0002. Expected costs of liquidating assets are $25,000.Requireda. Calculate the cumulative effect of the adjustment to Farmworth's net assets due to adoption of the liquidation basis of accounting.Use a negative sign with your answer if the cumulative effect reduces net assets.b. Prepare a statement of net assets in liquidation as of March 1Use a negative sign with your net assets answer, if appropriate.

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