A company with a $2,000,000 deficit undertakes a quasi-reorganization on November 1,2017.Certain assets will be written down by $400,000 to their present fair market value.Liabilities will remain the same.Capital stock was $3,000,000 and additional paid-in capital was $1,000,000 before the quasi-reorganization.How would the entries to accomplish these changes on November 1,2017,affect each of the following? Capital Stock Total Stockholders' Equity
A) No effect No effect
B) No effect Decrease
C) Decrease Decrease
D) Decrease No effect
Correct Answer:
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