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Could someone help with the entries for this question? Smith Corporation has gone through bankruptcy and is ready to emerge as a reorganized entity on
Could someone help with the entries for this question?
Smith Corporation has gone through bankruptcy and is ready to emerge as a reorganized entity on December 31,2020 . On this date, the company has the following assets (fair value is based on discounting the anticipated future cash flows): The company has a reorganization value of $813,000. Smith has 50,700 shares of $10 par value common stock outstanding. A deficit Retained Earnings balance of $671,000 also is reported. The owners will distribute 30,200 shares of this stock as part of the reorganization plan. The company's liabilities will be settled as follows: - Accounts payable of $190,000 (existing at the date on which the order for relief was granted) will be settled with an 8 percent, twoyear note for $36,900. - Accounts payable of $98.400 (incurred since the date on which the order for relief was granted) will be paid in the regular course of business. - Note payable-First Metropolitan Bank of $226,000 will be settled with an 8 percent, five-year note for $50,400 and 15,100 shares of the stock contributed by the owners. - Note payable-Northwestern Bank of Tulsa of $356.000 will be settled with a 7 percent, eight-year note for $107,000 and 15,100 shares of the stock contributed by the owners. b. Prepare a balance sheet for Smith Corporation upon its emergence from reorganization Step by Step Solution
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