The Larisa Company is exiting bankruptcy reorganization with the following accounts:Book ValueFair Value$ 81,000$ 92,000ReceivablesInventoryBuildings201,000301,000301, 000331,00022,000(71, 000)212,000402,000301,000LiabilitiesCommon stockAdditional paid-in capitalRetained earnings (deficit)The company's assets have a $761,000 reorganization value. As part of the reorganization, thecompany's owners transferred 70 percent of the outstanding stock to the creditors.Prepare the journal entry (or entries) necessary to adjust the company's records to fresh startaccounting. (If no entry is required for a transaction/event, select "No journal entry required" in thefirst account field.)

A journal entry is an accounting entry that is used to record a business transaction in the…

The Larisa Company is exiting bankruptcy reorganization with the Fair Value $ 92,000 212,000 402,000 301,000 Book Value $ 81,000 201,000 301,000 301,000 331,000 22,000 (71,000) Receivables Inventory Buildings Liabilities Common stock Additional paid-in capital Retained earnings (deficit) The company's assets have a $761,000 reorganization value. As p

The Larisa Company is exiting bankruptcy reorganization with the Fair Value $ 92,000 212,000 402,000 301,000 Book Value $ 81,000 201,000 301,000 301,000 331,000 22,000 (71,000) Receivables Inventory Buildings Liabilities Common stock Additional paid-in capital Retained earnings (deficit) The company's assets have a $761,000 reorganization value. As p

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

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…
33. Integrity, Inc is insolvent and its statement of affairs show: Estimated gain on realization of assets P2,000,000 Estimated loss on realization of assets 2,560,000 Additional assets, 1,200,000 Additional liabilities 960,000 Ordinary shares 12,000,000 Deficit 11,200,000 The pro-rata payment to stockholders on the peso is
Please need answer
The following items were displayed in the statement of affairs of a Corporation: Unsecured liabilities without priority P150,000 Fully secured creditors 20,000 Partially secured creditors (Secured with asset valued at P10,000)15,000 Stockholder's equity 50,000 Loss on realization of assets 60,000 Estimated taxes and administrative costs that have not been entered in the records 10,000 Based on the foregoing information, how much should the partially secured creditors expect to receive on the liquidation?
Please help me !
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
On December 31, 2021, the company presented the following information: Ordinary share capital, P50 par P6,000,000 Share premium 300,000 Retained earnings (1,200,000) The company decided to undergo quasi reorganization. As a result, the company's property, plant and equipment with cost of P8,000,000 and book value of P4,000,000 has recoverable amount of P3,000,000. Also, inventory would be written down by P300,000. The company will redeem its P50 par value ordinary shares and will issue equal number of ordinary shares with P30 par value. Based on the foregoing, determine balance of share premium after the quasi reorganization
47 ABC Corporation has become insolvent and a statement of affairs is being prepared. The following data are given. Market value of assets pledged with fully secured creditors 150,000 Fully secured creditors 50,000 Market value of assets pledged with partly secured creditors 90,000 Partly secured creditors 150,000 Creditors with priority 46,000 Unsecured creditors 80,000 Free assets 76,000 How much is the estimated amount available?
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…
7 DUFFLE Corp. had the following data ascertained before liquidation: Total book value of the assets were P250,000. The book value of the inventories, P80,000 had an excess in the amount of P26,000 over its estimated fair value. The equipment’s estimated fair value had an excess in the amount of P2,500 over its book value of P120,000. Included in the book value of the assets was prepaid expenses of P18,000 which was considered worthless. Other assets not mentioned above have an estimated fair value which was P15,000 less than its book value. Total liabilities were P200,000. The accounts payable in the amount of P70,000 was secured by the inventories while the notes payable in the amount of P95,000 was secured by the equipment. Other liabilities not mentioned includes salaries and taxes in the amount of P12,500. what is the estimated recovery percentage for the notes payable? Group of answer choices 96.14% 95.90% 100% 96.43%