a. record the entry to adjust asset values to fair valueb. record the entry to reduce additional paid in capital balance to correct figure, to close out gain account, and eliminate deficit. The Larisa Company is exiting bankruptcy reorganization with the following accounts:ReceivablesInventoryBuildingsLiabilitiesBook Value Fair Value$ 99,000 $128,000219,000319,000319,000349,000248,000438,000319,000Common stockAdditional paid-inсapitalRetained earnings(deficit)58,000(89,000)The company's assets have a $869,000 reorganization value. As part of the reorganization, the company's ownerstransferred 75 percent of the outstanding stock to the creditors.Prepare the journal entry (or entries) necessary to adjust the company's records to fresh start accounting. (If no entry isrequired for a transaction/event, select "No journal entry required" in the first account field.)

Accounts Title and Explanation Debit Credit Receivables 29000 Inventory 29000 Buildings 119000 Goodwill 55000 Retained Earnings (Eliminate Deficit) 89000 Additional Paid in capital 143000Calculation Receivable Fair Value -Book Value 128000-99000 29,000 Inventory Fair Value -Book Value 248000-219000 29,000 Building Fair Value -Book Value 438000-319000 119,000 Goodwill Company's Assets -Fair value of Assets 869000-(128000+248000+438000) 55,000 Additional Paid in capital Company's Assets -(Liabilities +Common Stock)-Additional paid in capital 869000-(319000+349000)-58000 143,000

Answered: The Larisa Company is exiting…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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a. record the entry to adjust asset values to fair value

b. record the entry to reduce additional paid in capital balance to correct figure, to close out gain account, and eliminate deficit.

The Larisa Company is exiting bankruptcy reorganization with the following accounts:
Receivables
Inventory
Buildings
Liabilities
Book Value Fair Value
$ 99,000 $128,000
219,000
319,000
319,000
349,000
248,000
438,000
319,000
Common stock
Additional paid-in
сapital
Retained earnings
(deficit)
58,000
(89,000)
The company's assets have a $869,000 reorganization value. As part of the reorganization, the company's owners
transferred 75 percent of the outstanding stock to the creditors.
Prepare the journal entry (or entries) necessary to adjust the company's records to fresh start accounting. (If no entry is
required for a transaction/event, select "No journal entry required" in the first account field.)

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Record the entry to adjust asset values to fair value.

Record the entry to reduce additional paid in capital balance to correct figure, to close out gain account, and to eliminate deficit.

How do I do this? What part of this is the adjust asset value and what part is the deficit entry

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