a Company is exiting bankruptcy reorganization with the following accounts: Book Value Fair Value Receivables $ 95,000 $ 120,000 Inventory 215,000 240,000 Buildings 315,000 430,000 Liabilities 315,000 315,000 Common stock 345,000 Additional paid-in capital 50,000 Retained earnings (deficit) (85,000 )
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The Larisa Company is exiting bankruptcy reorganization with the following accounts:
| Book Value | Fair Value | |||||
| Receivables | $ | 95,000 | $ | 120,000 | ||
| Inventory | 215,000 | 240,000 | ||||
| Buildings | 315,000 | 430,000 | ||||
| Liabilities | 315,000 | 315,000 | ||||
| Common stock | 345,000 | |||||
| Additional paid-in capital | 50,000 | |||||
| (85,000 | ) | |||||
The company's assets have a $835,000 reorganization value. As part of the reorganization, the company's owners transferred 70 percent of the outstanding stock to the creditors.
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- The Larisa Company is exiting bankruptcy reorganization with the following accounts: Book Value Fair Value Receivables $ 87,000 $ 104,000 Inventory 207,000 224,000 Buildings 307,000 414,000 Liabilities 307,000 307,000 Common stock 337,000 Additional paid-in capital 34,000 Retained earnings (deficit) (77,000 ) The company's assets have a $787,000 reorganization value. As part of the reorganization, the company's owners transferred 70 percent of the outstanding stock to the creditors. 1) Record the entry to adjust asset values to fair value. 2) Record the entry to reduce additional paid in capital balance to correct figure, to close out gain account, and to eliminate deficit.The Larisa Company is exiting bankruptcy reorganization with the following accounts: Book Value Fair Value Receivables $ 87,000 $ 104,000 Inventory 207,000 224,000 Buildings 307,000 414,000 Liabilities 307,000 307,000 Common stock 337,000 Additional paid-in capital 34,000 Retained earnings (deficit) (77,000 ) The company's assets have a $787,000 reorganization value. As part of the reorganization, the company's owners transferred 70 percent of the outstanding stock to the creditors. Record the entry to reduce additional paid in capital balance to correct figure, to close out gain account, and to eliminate deficit.The Larisa Company is exiting bankruptcy reorganization with the following accounts: Book Value Fair Value Receivables $ 87,000 $ 104,000 Inventory 207,000 224,000 Buildings 307,000 414,000 Liabilities 307,000 307,000 Common stock 337,000 Additional paid-in capital 34,000 Retained earnings (deficit) (77,000 ) The company's assets have a $787,000 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. Record the entry to reduce additional paid in capital balance to correct figure, to close out gain account, and to eliminate deficit.
- 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…The Larisa Company is exiting bankruptcy reorganization with the following account balances: Net Book Value Fair Value Receivables $ 80,000 $ 90,000 Inventory 200,000 210,000 Buildings 300,000 400,000 Liabilities 800,000 800,000 Common stock 130,000 Additional paid-in capital 20,000 Retained earnings (deficit) (370,000) Larisa Company’s assets have a $760,000 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. Note: 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: Book Value Fair Value Receivables $ 80,000 $ 90,000 Inventory 200,000 210,000 Buildings 300,000 400,000 Liabilities 300,000 300,000 Common stock 330,000 Additional paid-in capital 20,000 Retained earnings (deficit) (70,000 ) The company's assets have a $760,000 reorganization value. As part of the reorganization, the company's owners transferred 80 percent of the outstanding stock to the creditors. Prepare the journal entry that is 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.) Entry Options Below Additional paid-in capital Buildings Common stock Goodwill Inventory Liabilities Receivables Retained earnings Make Journal Entry to General Journal
- The Larisa Company is exiting bankruptcy reorganization with the following accounts: Book Value Fair Value Receivables $80000 $90000 Inventory 200000 210000 Buildings 300000 400000 Liabilities 300000 300000 Common stock 330000 Additional paid-in capital 20000 Retained earnings (deficit) (70000) The company’s assets have a $760,000 reorganization value. As part of the reorganization, the company’s owners transferred 80 percent of the outstanding stock to the creditors.Prepare the journal entry that is necessary to adjust the company’s records to fresh start accounting.The Larisa Company is exiting bankruptcy reorganization with the following accounts: The company’s assets have a $760,000 reorganization value. As part of the reorganization, the company’s owners transferred 80 percent of the outstanding stock to the creditors. Prepare the journal entry that is necessary to adjust the company’s records to fresh start accounting.Alitech Corporation is liquidating under Chapter 7 of the Bankruptcy Act. The accounts of Alitech at the time of filing are summarized as follows: Estimated Realizable Book Value ValueCash $ 10,000 $ 10,000Accounts receivable-net 60,000 50,000Inventory 110,000 65,000Land 20,000 35,000Building 200,000 126,000Goodwill…
- Alitech Corporation is liquidating under Chapter 7 of the Bankruptcy Act. The accounts of Alitech at the time of filing are summarized as follows: Estimated Realizable Book Value ValueCash $ 10,000 $ 10,000Accounts receivable-net 60,000 50,000Inventory 110,000 65,000Land 20,000 35,000Building 200,000 126,000Goodwill…Ma Mannheim Corporation is ready to emerge from Chapter 11 bankruptcy under a reorganization plan accepted by all parties. Mannheim's balance sheet shows: Various assets $2,000,000 Prepetition liabilities, fully secured $400,000 Prepetition liabilities subject to compromise 1,360,000 Postpetition liabilities 820,000 Common stock 200,000 Retained deficit (780,000) TOTAL $2,000,000 TOTAL $2,000,000 There are no excess assets. The present value of future cash flows from the reorganized company's operating assets is $1,900,000 The creditors represented by the prepetition liabilities subject to compromise agree to take $580,000 in 7 percent notes payable plus 70 percent of the common stock as settlement. The old shareholders will have 30 percent of the common stock. After reorganization, Mannheim's retained earnings balance is Select one: a. $150,000 b. $(70,000) c. $500,000 d. $0.Ristoni Company is in the process of emerging from a Chapter 11 bankruptcy. It will apply fresh start accounting as of December 31, 2017. The company currently has 30,000 shares of common stock outstanding with a $240,000 par value. As part of the reorganization, the owners will contribute 18,000 shares of this stock back to the company. A retained earnings deficit balance of $330,000 exists at the time of this reorganization.The company has the following asset accounts: Book Value Fair value Accounts receivable $100000 $80000 Inventory 112000 90000 Land and buildings 420000 500000 Equipment 78000 65000 The company’s liabilities will be settled as follows. Assume that all notes will be issued at reasonable interest rates.∙ Accounts payable of $80,000 will be settled with a note for $5,000. These creditors will also get 1,000 shares of the stock contributed by the owners.∙ Accrued expenses of $35,000 will be settled with a note for $4,000. Note payable of…
