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The condensed balance sheets of Culver Limited, a small private company that follows ASPE, follow for the periods immediately before, and one year after, it
The condensed balance sheets of Culver Limited, a small private company that follows ASPE, follow for the periods immediately before, and one year after, it had completed a financial reorganization: For the year following the financial reorganization, the company reported net income of $215,000 and depreciation expense of $70,000, and paid a cash dividend of $25,000. As part of the reorganization, the company wrote down inventory by $130,000 to reflect circumstances that existed before the reorganization. Also, the deficit, and any revaluation adjustment, was accounted for by charging amounts against contributed surplus until it was eliminated, with any remaining amount being charged against common shares. The common shares are widely held and there is no controlling interest. No purchases or sales of plant assets and no share transactions occurred in the year following the reorganization. Prepare all the journal entries made at the time of the reorganization. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
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