A company is coming out of reorganizationBook Value80,000ReceivablesInventoryBuildingsLiabilitiesCommon stockAdditional paid-in capitalRetained earnings (deficit)200,000ReceivablesGoodwillBuildingsInventory300,000300,000Additional Paid-in CapitalRetained Earnings330,00020,000(70,000)with the following accounts:Fair ValueGeneral Journal90,000The company's assets have a $760,000 reorganization value. As part of thereorganization, the company's owners transferred 80 percent of the outstanding stock tothe creditors.210,000Prepare the journal entry that is necessary to adjust the company's records to fresh startaccounting.400,000300,000DebitCredit

A journal entry is a form of accounting entry that is used to report a business transaction in a…

A company is coming out of reorganization Receivables Inventory Buildings Liabilities Common stock Additional paid-in capital Retained earnings (deficit) Book Value 80,000 200,000 300,000 Receivables Goodwill Buildings Inventory 300,000 330,000 Additional Paid-in Capital Retained Earnings 20,000 (70,000) The company's assets have a $760,000 reorganization value. As part of the reorganization, the company's owners transferred 80 percent of the outstanding stock to the creditors. with the following accounts: Fair Value $ Prepare the journal entry that is necessary to adjust the company's records to fresh start accounting. General Journal 90,000 210,000 400,000 300,000 Debit Credit

A company is coming out of reorganization Receivables Inventory Buildings Liabilities Common stock Additional paid-in capital Retained earnings (deficit) Book Value 80,000 200,000 300,000 Receivables Goodwill Buildings Inventory 300,000 330,000 Additional Paid-in Capital Retained Earnings 20,000 (70,000) The company's assets have a $760,000 reorganization value. As part of the reorganization, the company's owners transferred 80 percent of the outstanding stock to the creditors. with the following accounts: Fair Value $ Prepare the journal entry that is necessary to adjust the company's records to fresh start accounting. General Journal 90,000 210,000 400,000 300,000 Debit Credit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The Larisa Company is exiting bankruptcy reorganization with the following account balances: Net Book Value Fair Value Receivables $ 80,000 $ 90,000 Inventory 200,000 210,000 Buildings 300,000 400,000 Liabilities 800,000 800,000 Common stock 130,000 Additional paid-in capital 20,000 Retained earnings (deficit) (370,000) Larisa Company’s assets have a $760,000 reorganization value. As part of the reorganization plan, the company’s owners transferred 80 percent of the outstanding stock to the creditors in exchange for a $500,000 reduction in the liabilities. Required: Prepare the journal entry (or entries) necessary to adjust the company’s records to fresh start accounting. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
ABC Company has incurred losses continuously since its inception. At the recommendation of one its directors, the board of directors agreed to implement quasi-reorganization, through reduction of par value which was also agreed by its shareholders. Before effecting the quasi-reorganization, the following are the balances in the Shareholder's Equity: Ordinary share capital, P 100 par P 25,000,000 Share Premium 10,000,000 Accumulated losses (15,000,000) Also, part of the restatement of assets are reduction in the value of the building of P 500,000 and P 200,000 write down in the value of the inventory. The company also recognized unrecorded liabilities of P 300,000. To eliminated the deficit, ABC should reduce the ordinary share capital by
PLEASE PROVIDE COMPUTATION! 18. Yemen;s July 1, 2018, statement of financial position after the quasi-reorganization should show total assets ofa. P4,000,000 c. P4,375,000b. P2,500,000 d. P3,875,000
Liquidation Southwestern Wear Inc. has the following balance sheet: Current assets $1,875,000 Accounts payable $ 375,000 Fixed assets 1,875,000 Notes payable 750,000 Subordinated debentures 750,000 Total debt $1,875,000 Common equity 1,875,000 Total assets $3,750,000 Total liabilities & equity $3,750,000 The trustee's costs total $296,000, and the firm has no accrued taxes or wages. Southwestern has no unfunded pension liabilities. The debentures are subordinated only to the notes payable. If the firm goes bankrupt and liquidates, how much will each class of investors receive if a total of $2.3 million is received from sale of the assets? Round your answers for monetary values to the nearest dollar and for percentage values to the nearest whole number. If your answer is zero, enter “0”. Enter your answers as positive values. Distribution of proceeds on liquidation: Proceeds from the sale of assets $ Less: 1. First…
Rainy Co financial position before its liquidation is as follows: Assets Cash 100,000 Accounts receivable 600,000 Inventory 900,000 Equipment, net 400,000 total 2,000,000 Liab and Equity Accounts payable 1,600,000 Loan payable 1,500,000 Share Capital 2,000,000 Retained Earnings (deficit) (3,100,000) total 2,000,000 Transactions in the first quarter of liquidation are as follows: -90% of the accounts receivable were collected. Commission of third party collectors amounted to 108,000. The collectors expect to collect the remaining receivables in the next quarter. -Half of the inventory was sold at 80% of carrying amount. The other half is expected to be sold at 60% of carrying amount. -the equipment was sold for 380,000 after it was refurbished for 50,000 -100,000 accounts payable were paid -employee termination benefits of 100,000 were recorded and 80,000 of that amount were paid -the lender accepted 1,000,000 as full payment of the loan -the liquidation costs of 50,000 were paid…
This is under Corp Liquidation and Reorganization
Logan Corp. has incurred losses from operations for many years. At the recommendation of the newly hired president, the board of directors noted to implement a quasi-reorganization, subject to the stockholders' and creditors' approval. Immediately, prior to the quasi-reorganization, on June 30, 2016, Logan's balance sheet was as follows: Assets Current assets P1,375,000 Property, plant and equipment 3,375,000 Other noncurrent assets 500,000 Total assets P5,250,000 Liabilities and Stockholders' Equity Total liabilities P1,500,000 Ordinary shares, P10 par value…
ABC Company is in a capital deficiency position and is considering the possibility of liquidation. An analysis of the assets and liabilities of the entity is provided: Assets at net realizable value (pledged against liabilities of P150,000) 250,000 Assets at net realizable value (pledged against liabilities of P260,000) 100,000 Assets at net realizable value (not pledged against any liabilities) 160,000 Liabilities with priority 85,000 Unsecured creditors 400,000 Round off the estimated recovery percentage to XX.XX%, if needed. How much is the estimated payment to partially secured creditors?
Balances in shareholders’ equity accounts at December 31, 2019 are: Share capital, P30 par, 50,000 shares authorized, 40,000 shares outstanding P 1,200,000 Share premium 100,000 Retained earnings (364,000) A quasi-reorganization was approved. Par value is to be P20 per share, equipment written down P101,800, and inventory increased by P5,800. How much share premium from reorganization should initially be recorded?