Question
The Larisa Company is coming out of reorganization with the following accounts: Book Value Fair Value Receivables $ 93,000 $ 116,000 Inventory 213,000 236,000 Buildings
| The Larisa Company is coming out of reorganization with the following accounts: |
| Book Value | Fair Value | |||
| Receivables | $ | 93,000 | $ | 116,000 |
| Inventory | 213,000 | 236,000 | ||
| Buildings | 313,000 | 426,000 | ||
| Liabilities | 313,000 | 313,000 | ||
| Common stock | 343,000 | |||
| Additional paid-in capital | 46,000 | |||
| Retained earnings (deficit) | (83,000) | |||
| The company's assets have a $833,000 reorganization value. As part of the reorganization, the company's owners transferred 75 percent of the outstanding stock to the creditors. |
| Prepare the journal entry that is necessary to adjust the company's records to fresh start accounting. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) |
Journal Entry Worksheet
Record the assets and liabilities after reconstruction.
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Accounting Principles
Authors: Jerry Weygandt, Paul Kimmel, Donald Kieso
11th Edition
111856667X, 978-1118566671
