Wayne Corporation, a Manufacturer of Farm Machinery, Had Poor Financial

Wayne Corporation, a manufacturer of farm machinery, had poor financial results last year because of a drought.Back orders indicate complete recovery this year.To eliminate a deficit that increased when the books were closed at the end of last year, the corporation has received stockholders' and state approval to conduct a quasi-reorganization on January 2.
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Required:
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Prepare journal entries as of January 2 to record the quasi-reorganization and the stockholders' equity section of its balance sheet immediately thereafter.The following data are pertinent:
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a.Inventory at year-end is shown at FIFO cost of $280,000.Inventory is to be valued at replacement cost of $250,000.?
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b.Property, plant, and equipment are shown in the records at $4,000,000, net of accumulated depreciation.They are to be written down to fair value of $3,100,000.?
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c.Stockholders' equity consists of:
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$\begin{array}{lr}\text {Common stock ( \(\$ 10\) par) 400,000 shares issued}\\\text { and outstanding } & \$ 4,000,000 \\\text { Additional paid-in capital } & 100,000\\\text { Retained earnings (deficit). } & \underline{(2,600,000)} \\\text { Total stockholders' equity } & \underline{\$ 1,500,000}\end{array}$

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Par value of stock is to be reduced from $10 to $1 per share.Paid-in capital related to the former stock is to be canceled.?
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d.The deficit is to be eliminated.?
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