a Company is exiting bankruptcy reorganization with the following accounts: Book Value Fair Value Receivables $ 95,000 $ 120,000 Inventory 215,000 240,000 Buildings 315,000 430,000 Liabilities 315,000 315,000 Common stock 345,000 Additional paid-in capital 50,000 Retained earnings (deficit) (85,000 )
a Company is exiting bankruptcy reorganization with the following accounts: Book Value Fair Value Receivables $ 95,000 $ 120,000 Inventory 215,000 240,000 Buildings 315,000 430,000 Liabilities 315,000 315,000 Common stock 345,000 Additional paid-in capital 50,000 Retained earnings (deficit) (85,000 )
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 accounts:
| Book Value | Fair Value | |||||
| Receivables | $ | 95,000 | $ | 120,000 | ||
| Inventory | 215,000 | 240,000 | ||||
| Buildings | 315,000 | 430,000 | ||||
| Liabilities | 315,000 | 315,000 | ||||
| Common stock | 345,000 | |||||
| Additional paid-in capital | 50,000 | |||||
| (85,000 | ) | |||||
The company's assets have a $835,000 reorganization value. As part of the reorganization, the company's owners transferred 70 percent of the outstanding stock to the creditors.
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