Prepare the required journal entries for the financial reorganization of Yutao Shui Corporation. ( cu
Prepare the required journal entries for the financial reorganization of Yutao Shui Corporation. ( cu
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 25P: The controller of Red Lake Corporation has requested assistance in determining income, basic...
Related questions
Question
![The following account balances are available from the ledger of Yutao Shui Corporation on December 31, 2019:
Common Shares (22,000 shares authorized and outstanding) $ 1,144,000
Retained Earnings (Deficit)
(190,000)
On January 2, 2020, the corporation put into effect a shareholder-approved reorganization by agreeing to pass the common shares
over to the creditors in full payment of the $240,000 Notes Payable, writing up Buildings by $128,300, and eliminating the deficit.
Assume that Yutao Shui follows ASPE.
Prepare the required journal entries for the financial reorganization of Yutao Shui Corporation. (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 for the
amounts)
Account Titles and Explanation
(To record the elimination of the deficit against share capital)
(To record write-up of buildings to fair value and
record the negotiated change in control)
Debit
Credit](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4096fdaf-f86c-4577-883d-ced5307743e3%2Fd3a61e13-d54e-4df3-85b9-c8151e6781a1%2Frtqpi4_processed.png&w=3840&q=75)
Transcribed Image Text:The following account balances are available from the ledger of Yutao Shui Corporation on December 31, 2019:
Common Shares (22,000 shares authorized and outstanding) $ 1,144,000
Retained Earnings (Deficit)
(190,000)
On January 2, 2020, the corporation put into effect a shareholder-approved reorganization by agreeing to pass the common shares
over to the creditors in full payment of the $240,000 Notes Payable, writing up Buildings by $128,300, and eliminating the deficit.
Assume that Yutao Shui follows ASPE.
Prepare the required journal entries for the financial reorganization of Yutao Shui Corporation. (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 for the
amounts)
Account Titles and Explanation
(To record the elimination of the deficit against share capital)
(To record write-up of buildings to fair value and
record the negotiated change in control)
Debit
Credit
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning