The plan of reorganizing for Taylor Companies, Inc., was approved by the court, stockholders, and creditors on December 31, 20X1. The plan calls for a general restructuring of all of Taylors debt. The companys liability and capital accounts on December 31, 20X1, are as follows:

Accounts Payable (postpetition)	$	31,100
Liabilities Subject to Compromise:
Accounts Payable		81,100
Notes Payable, 8%, unsecured		150,800
Interest Payable		37,800
Bonds Payable, 10%		200,000
Common Stock, $1 par		101,200
Additional Paid-In Capital		201,500
Retained Earnings (deficit)		(178,800	)
Total	$	624,700

A total of $31,100 of accounts payable has been incurred since the company filed its petition for relief under Chapter 11. No other liabilities have been incurred since the petition was filed. No payments have been made on the liabilities subject to the compromise that existed on the petition date. Under the terms of the reorganization plan:

1.	The accounts payable creditors existing at the date the petition was filed agree to accept $74,612 of net accounts receivable in full settlement of their claims.
2.	The holders of the 8 percent notes payable of $150,800 plus $17,800 of interest payable agree to accept land having a fair value of $122,148 and a book value of $85,700.
3.	The holders of the 10 percent bonds payable of $200,000 plus $20,000 of interest payable agree to cancel accrued interest of $15,000, accept cash payment of the remaining $5,000 of interest, and accept a secured interest in the companys equipment in exchange for extending the term of the bonds for an additional year at no interest.
4.	The common shareholders agree to reduce the deficit by changing the stocks par value to $2 per share and eliminating any remaining deficit after recognition of all gains or losses from the debt restructuring transactions specified in the plan of reorganization. The deficit will be eliminated by reducing additional paid-in capital.

Required:

a.	Prepare a recovery analysis for the plan of reorganization, concluding with the total recovery of each liability and capital component of Taylor Companies. (Amounts to be deducted should be indicated with minus sign.)

Answer is not complete. TAYLOR COMPANIES, INC Plan of Reorganization Recovery Analysis December 31, 20X1 Recovery Total Recovery Common Stock Elimination of Debt Reduction of Taylor's Assets Pre- Surviving Debt Confirmation S Value % % and Equity S (31,100) 100 Post-petition liabilities (31,100) (31,100) Claims/Interest 90 X Accounts Payable (81,100) (150,800) Notes Payable 83 Related Interest Payable (200,000) 100 Bonds Payable (200,000) (200,000) (6,000) 25 C Related Interest Payable 18,000 (24,000) (6,000) (455,900) 18,000 Total Common shareholders: (200,000) (200,000)x) Common Stock (101,200) (101,200) 100 Additional Paid-In Capital (201,500) Retained 178,800 Deficit (178,800) $ (262,000) (610,900) (231,100) (6,000) 100 0 Total (437,100) (200,000) b. Prepare the journal entries to account for the discharge of the debt and the restructuring of the common equity in fulfillment of the plan of reorganization. select "No journal entry required" in the first account field.) no entry is required for a transactionlevent Answer is not complete. No Event General Journal Debit Credit Accounts payable Notes payable 1 1 81,100 150,800 37,800 Interest payable Cash 5,000 Accounts receivable (net) 74,612 85,700 Land Gain on disposal of land 36,448 Gain on discharge of debt 67,940 Common stock ($1 par) 2 2 101,200 Additional paid-in capital 201.500x Gain on disposal of land Gain on discharge of debt 67,940 Common stock ($2 par) 200,000 178,800 Retained earnings