Question
The Larisa Company is coming out of reorganization with the following accounts: Book Value Fair Value Receivables $ 97,000 $ 124,000 Inventory 217,000 244,000 Buildings
| The Larisa Company is coming out of reorganization with the following accounts: |
| Book Value | Fair Value | |||
| Receivables | $ | 97,000 | $ | 124,000 |
| Inventory | 217,000 | 244,000 | ||
| Buildings | 317,000 | 434,000 | ||
| Liabilities | 317,000 | 317,000 | ||
| Common stock | 347,000 | |||
| Additional paid-in capital | 54,000 | |||
| Retained earnings (deficit) | (87,000) | |||
| The company's assets have a $867,000 reorganization value. As part of the reorganization, the company's owners transferred 80 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. |
| General Journal | Debit | Credit |
| Buildings | ||
| Goodwill | ||
| Inventory | ||
| Receivables | ||
| Retained earnings | ||
| Additional paid in capital |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Statistical Audit Automation The Principles Of Statistical Sampling Of Business Accounts
Authors: Nathan Poeschl
1st Edition
B0B17YP1SR, 979-8829041991
