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Indigo Products Inc. has the following account balances on March 31, 2023: Inventory Buildings (net) Patents (net) Bank loan payable Common shares, no par value, 10,200 shares outstanding Deficit $375,000 682,500 552,500 328,500 877,200 (1,248,500) In April 2023, management agrees to a financial reorganization. As part of the reorganization creditors are willing to forgive the debt in exchange for 100% of the outstanding shares. It is determined that assets have the following fair values: inventory $152,000, patent $253,500, and buildings $1,107,500. Prepare the required journal entries for the financial reorganization. Use Deficit account. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entri before credit entries. Record journal entries in the order presented in the problem.)

Indigo Products Inc. has the following account balances on March 31, 2023: Inventory Buildings (net) Patents (net) Bank loan payable Common shares, no par value, 10,200 shares outstanding Deficit $375,000 682,500 552,500 328,500 877,200 (1,248,500) In April 2023, management agrees to a financial reorganization. As part of the reorganization creditors are willing to forgive the debt in exchange for 100% of the outstanding shares. It is determined that assets have the following fair values: inventory $152,000, patent $253,500, and buildings $1,107,500. Prepare the required journal entries for the financial reorganization. Use Deficit account. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entri before credit entries. Record journal entries in the order presented in the problem.)

FINANCIAL ACCOUNTING
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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journal entries to ;

To restate for impairment of assets
to close deficit
to restate assests and liabilities
 
f5 w rt Indigo Products Inc. has the following account balances on March 31, 2023: Inventory Buildings (net) Patents (net) Bank loan payable Common shares, no par value, 10,200 shares outstanding Deficit $375,000 682,500 552,500 328,500 877,200 (1,248,500) In April 2023, management agrees to a financial reorganization. As part of the reorganization creditors are willing to forgive the debt in exchange for 100% of the outstanding shares. It is determined that assets have the following fair values: inventory $152,000, patent $253,500, and buildings $1,107,500. Prepare the required journal entries for the financial reorganization. Use Deficit account. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entrie before credit entries. Record journal entries in the order presented in the problem.)
Transcribed Image Text:f5 w rt Indigo Products Inc. has the following account balances on March 31, 2023: Inventory Buildings (net) Patents (net) Bank loan payable Common shares, no par value, 10,200 shares outstanding Deficit $375,000 682,500 552,500 328,500 877,200 (1,248,500) In April 2023, management agrees to a financial reorganization. As part of the reorganization creditors are willing to forgive the debt in exchange for 100% of the outstanding shares. It is determined that assets have the following fair values: inventory $152,000, patent $253,500, and buildings $1,107,500. Prepare the required journal entries for the financial reorganization. Use Deficit account. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entrie before credit entries. Record journal entries in the order presented in the problem.)
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