Chapter 18, Problem 18.13P

(1)

To determine

Quasi Reorganization

Quasi reorganization would be approved by the board of directors and shareholders of the company, when a company is undergoing in financial difficulties, but expecting growth in the future. This provision is used to reduce the deficit or accumulated shortage or debit balance in the retained earnings by revaluing assets, liabilities, and shareholders’ equity, under unfavorable circumstances.

To journalize: The quasi reorganization transactions for Corporation CC.

(2)

To determine

To prepare: Balance sheet after the revaluation and elimination.