Answered: The Larisa Company is exiting…

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter24: Bankruptcy, Reorganization, And Liquidation

Section: Chapter Questions

Problem 4P

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	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)

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.

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