Following is the balance sheet of Tontoe Corporation on July 1, 20X5, just prior to obtaining the required stockholder approval to undergo a quasi-reorganization:
?
?
Required:
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Prepare the journal entries necessary to record the following items that were part of the quasi-reorganization:
?
a.Inventory is to be reduced to its fair market value of $90,000.?
?
b.The plant and equipment is to be revalued to $70,000 through the Accumulated Depreciation account.?
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c.Par value of the stock is reduced to $1 per share and the deficit is eliminated.?

Question

Following is the balance sheet of Tontoe Corporation on July 1, 20X5, just prior to obtaining the required stockholder approval to undergo a quasi-reorganization:
?
?
  Required:
?
Prepare the journal entries necessary to record the following items that were part of the quasi-reorganization:
? 
a.Inventory is to be reduced to its fair market value of $90,000.?
?
b.The plant and equipment is to be revalued to $70,000 through the Accumulated Depreciation account.?
?
c.Par value of the stock is reduced to $1 per share and the deficit is eliminated.?

Quizplus · Accepted Answer

The Answer of Following is the balance sheet of Tontoe Corporation on July 1, 20X5, just prior to obtaining the required stockholder approval to undergo a quasi-reorganization:
?
?
  Required:
?
Prepare the journal entries necessary to record the following items that were part of the quasi-reorganization:
? 
a.Inventory is to be reduced to its fair market value of $90,000.?
?
b.The plant and equipment is to be revalued to $70,000 through the Accumulated Depreciation account.?
?
c.Par value of the stock is reduced to $1 per share and the deficit is eliminated.?

Following Is the Balance Sheet of Tontoe Corporation on July