Written down the inventory to an NRV óf P2,000,000.Written off the goodwill.Recognized a loss provision of P60,000 on a pending lawsuit.Reduced the par value per share to P50.Offset the resulting revaluation surplus and share premium tothe deficit.Requirement: Prepare the entries to effect the reorganization andprepare the financial position after the reorganization. 1. Hurricane Co.'s financial position is as follows:ASSETSBuilding- net 1,600,000Revalued the building at a fair value of P3,000,000.Written off 30% of the receivables.Hurricane Co. implemented a quasi-reorganization as follows:LIABILITIES & EQUITY2,940,000200,000 Liabilities4,000,000 Share capital, P100 par3,100,000 Retained earnings (deficit)Cash10,000,000Receivables(3,940,000)InventoryGoodwill100,0009,000,000Total9,000,000 Totalaa

Reorganization means where assets and liabilities are restated at fair value and profit is…

Written down the inventory to an NRV óf P2,000,000. Written off the goodwill. Recognized a loss provision of P60,000 on a pending lawsuit. Reduced the par value per share to P50. Offset the resulting revaluation surplus and share premium to the deficit. 195221 Requirement: Prepare the entries to effect the reorganization and prepare the financial position after the reorganization.

Written down the inventory to an NRV óf P2,000,000. Written off the goodwill. Recognized a loss provision of P60,000 on a pending lawsuit. Reduced the par value per share to P50. Offset the resulting revaluation surplus and share premium to the deficit. 195221 Requirement: Prepare the entries to effect the reorganization and prepare the financial position after the reorganization.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Mario Company has been incurring losses for several years. On December 31, 2019, the SEC permitted Mario to implement a quasi-reorganization after due approval from its shareholders and creditors. Its balance sheet before quasi-reorganization is as follows. [Refer to the figure]The quasi-reorganization plan provides the following:• The PPE shall be revalued at an appraised amount of P8,500,000.• Goodwill shall be written off in full.• Par value shall be reduced by forty percent.• The deficit shall be wiped out firstly from Revaluation Surplus and any unabsorbed amount from Share Premium.1. How much is the total assets after the quasi-reorganization? 2. How much is the Share Premium after the quasi-reorganization? 3. How much is the Retained Earnings after the quasi-reorganization?
Jade Company has been incurring losses for several years. On December 31, 2019, the SEC permitted Jade to implement a quasi-reorganization after due approval from its shareholders and creditors. Its balance sheet before quasi-reorganization is as follows. [Refer to the figure]The quasi-reorganization plan provides the following:• The PPE shall be revalued at an appraised amount of P8,500,000.• Goodwill shall be written off in full.• Par value shall be reduced by forty percent.• The deficit shall be wiped out firstly from Revaluation Surplus and any unabsorbed amount from Share Premium. Cash 400,000 Inventory 5,200,000 Property, Plant and Equipment 8,200,000 Goodwill 200,000 Liabilities 4,450,000 Share Premium 3,200,000 Deficit 2,150,000 Questions: 1. How much is the total assets after the quasi-reorganization? 2. How much is the Share Premium after the quasi-reorganization? 3. How much is the Retained Earnings after the quasi-reorganization?
Below is the statement of realization and liquidation of Alex Corporation, which is under receivership for the month ended July 31, 20x5:AssetsAssets acquired: Assets realized:Accounts receivable P20,000 Investment at fair value P24,000Assets to be realized: Assets not realized:Investment at fair value 32,000 Accounts receivable 10,000Accounts receivable 76,000 Merchandise inventory 30,000Merchandise inventory 40,000LiabilitiesLiabilities liquidated: Liabilities to be liquidated:Accounts payable P56,000 Accounts payable P90,000Liabilities not liquidated: Liabilities assumed:Accounts payable 20,000 Accounts payable 16,000Accrued expenses 4,000Supplementary Items Supplementary Expenses Supplementary IncomePurchases P3,000 Sales on account P12,000Expenses 15,000 Cash sales 40,000Interest income 4,000QUESTIONS:9. What is the net income or loss for the period? ______________
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.
A statement of realization and liquidation has been prepared for the RESTLESS Corporation.  The following information is available:Assets to be realized- P60,000                Liabilities assumed- P50,000Assets acquired- P40,000               Liabilities not liquidated- P40,000Assets realized- P55,000                Liabilities to be Liquidated- P80,000Assets not realized- P15,000               Liabilities liquidated- P60,000Supplementary credits- P110,000               Supplementary Charges- P97,000How much is shareholders’ equity, beg. assuming that the cash balance, ending amounted to P50,000? CHOICES: P92,000 P55,000 P118,000 P12,000
A statement of realization and liquidation has been prepared for the RESTLESS Corporation.  The following information is available:Assets to be realized- P60,000                Liabilities assumed- P50,000Assets acquired- P40,000               Liabilities not liquidated- P40,000Assets realized- P55,000                Liabilities to be Liquidated- P80,000Assets not realized- P15,000               Liabilities liquidated- P60,000Supplementary credits- P110,000               Supplementary Charges- P97,000How much is shareholders’ equity, beg. assuming that the cash balance, ending amounted to P50,000? a. P118,000 b. P12,000 c. P92,000 d. P55,000
A statement of realization and liquidation has been prepared for the RESTLESS Corporation.  The following information is available:Assets to be realized- P60,000                Liabilities assumed- P50,000Assets acquired- P40,000               Liabilities not liquidated- P40,000Assets realized- P55,000                Liabilities to be Liquidated- P80,000Assets not realized- P15,000               Liabilities liquidated- P60,000Supplementary credits- P110,000               Supplementary Charges- P97,000How much is shareholders’ equity, beg. assuming that the cash balance, ending amounted to P50,000?
A statement of realization and liquidation has been prepared for the RESTLESS Corporation. The following information is available:Assets to be realized- P60,000 Liabilities assumed- P50,000Assets acquired- P40,000 Liabilities not liquidated- P40,000Assets realized- P55,000 Liabilities to be Liquidated- P80,000Assets not realized- P15,000 Liabilities liquidated- P60,000Supplementary credits- P110,000 Supplementary Charges- P97,000How much is the net increase (decrease) in retained earnings?
The following is information for Novak Corp. for the year ended December 31, 2020: Sales revenue $1,420,000 Loss on inventory due to decline in net realizable value $70,000 Unrealized gain on FV-OCI equity investments 46,000 Loss on disposal of equipment 45,000 Interest income 9,000 Depreciation expense related to buildings omitted by mistake in 2019 56,000 Cost of goods sold 852,000 Retained earnings at December 31, 2019 950,000 Selling expenses 71,000 Loss from expropriation of land 57,000 Administrative expenses 52,000 Dividends declared 46,000 Dividend revenue 15,000 The effective tax rate is 25% on all items. Novak prepares financial statements in accordance with IFRS. The FV-OCI equity investments trade on the stock exchange. Gains/losses on FV-OCI investments are not recycled through net income. a)Prepare the retained earnings section of the statement of changes in equity for 2020. (List…
Patimpalak Co. has been incurring losses for several years. On December 31, 2020, the SEC permitted Patimpalak to implement a quasi-reorganization after due approval of Patimpalak’s shareholders and creditors. Patimpalak’s statement of financial position immediately before the quasi-reorganization is shown below: Cash................................................................................................. 400,000 Receivables...................................................................................... 8,000,000 Inventory......................................................................................... 6,200,000 Building – net................................................................................... 3,200,000 Goodwill........................................................................................... 200,000 Liabilities.......................................................................................... 5,880,000 Share capital, ₱400, 50,000…