The Larisa Company is exiting bankruptcy reorganization with the following account balances: Net Book Value Fair Value Receivables $ 100,000 $ 130,000 Inventory 220,000 250,000 Buildings 320,000 440,000 Liabilities 820,000 820,000 Common stock 150,000 Additional paid-in capital 60,000 Retained earnings (deficit) (390,000) Larisa Company’s assets have a $870,000 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. Journal entry worksheet Note: Enter debits before credits. Transaction General Journal Debit Credit 1 these are the differnt lables please choose from these No journal entry required Additional paid-in capital Buildings Common stock Goodwill Inventory Liabilities Receivables Retained earnings
The Larisa Company is exiting bankruptcy reorganization with the following account balances: Net Book Value Fair Value Receivables $ 100,000 $ 130,000 Inventory 220,000 250,000 Buildings 320,000 440,000 Liabilities 820,000 820,000 Common stock 150,000 Additional paid-in capital 60,000 Retained earnings (deficit) (390,000) Larisa Company’s assets have a $870,000 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. Journal entry worksheet Note: Enter debits before credits. Transaction General Journal Debit Credit 1 these are the differnt lables please choose from these No journal entry required Additional paid-in capital Buildings Common stock Goodwill Inventory Liabilities Receivables Retained earnings
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Question
The Larisa Company is exiting bankruptcy reorganization with the following account balances:
Net Book Value | Fair Value | |
---|---|---|
Receivables | $ 100,000 | $ 130,000 |
Inventory | 220,000 | 250,000 |
Buildings | 320,000 | 440,000 |
Liabilities | 820,000 | 820,000 |
Common stock | 150,000 | |
Additional paid-in capital | 60,000 | |
(390,000) |
Larisa Company’s assets have a $870,000 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 worksheet
Note: Enter debits before credits.
|
|
these are the differnt lables please choose from these
- No journal entry required
- Additional paid-in capital
- Buildings
- Common stock
Goodwill - Inventory
- Liabilities
- Receivables
- Retained earnings
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