The Larisa Company is exiting bankruptcy reorganization with the following accounts: Receivables Inventory Buildings Liabilities Common stock Additional paid-in capital Retained earnings (deficit) Book Value Fair Value $ 81,000 $ 92,000 201,000 212,000 301,000 402,000 301,000 301,000 331,000 22,000 (71,000) The company's assets have a $761,000 reorganization value. As part of the reorganization, the company'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 start accounting. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
The Larisa Company is exiting bankruptcy reorganization with the following accounts: Receivables Inventory Buildings Liabilities Common stock Additional paid-in capital Retained earnings (deficit) Book Value Fair Value $ 81,000 $ 92,000 201,000 212,000 301,000 402,000 301,000 301,000 331,000 22,000 (71,000) The company's assets have a $761,000 reorganization value. As part of the reorganization, the company'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 start accounting. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The Larisa Company is exiting bankruptcy reorganization with the following accounts:
Receivables
Inventory
Buildings
Liabilities
Common stock
Additional paid-in capital
Retained earnings (deficit)
Book Value Fair Value
$ 92,000
$ 81,000
201,000
212,000
301,000
402,000
301,000
301,000
331,000
22,000
(71,000)
The company's assets have a $761,000 reorganization value. As part of the reorganization, the
company'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 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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