Question
The trial balance of Universal Inc. as at December 31, 2023 is as follows: Debit Credit Cash $ 66,500 Accounts receivable 142,500 Allowance for doubtful
The trial balance of Universal Inc. as at December 31, 2023 is as follows:
Debit Credit
Cash $ 66,500
Accounts receivable 142,500
Allowance for doubtful accounts 27,000
Inventory 225,000
Property, plant, and equipment 910,000
Accumulated depreciation 315,000
Patents 180,000
Accounts payable 165,000
Notes payable (10% interest) 225,000
Accrued interest on notes 60,000
12% bonds payable 600,000
Common stock (18,000 shares) 399,000
Retained earnings (deficit) 267,000
$1,791,000 $1,791,000
The following reorganization plan has been approved by the shareholders and the creditors:
The holders of the notes payable agree to cancel the accrued interest owing, to extend the due date, and to reduce the interest rate. In return they will receive a pledge of inventory and receivables as security throughout the life of the notes.
Trade creditors agree to accept a payment of $142,500 as full settlement of their claims.
The bondholders agree to exchange their bonds for $375,000 in 8% first-mortgage bonds and 45,000 common shares.
All parties have agreed that the following reflect the fair values of the individual assets: Accounts receivable $ 108,000 Allowance for doubtful accounts 3,000 Inventory 195,000 Property, plant, and equipment, net 405,000 Patents 255,000
Im looking for the journal entries and balance sheet after reorganization
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