A new CEO was hired to revive the floundering Heirloom Watch Corporation. The company had endured...
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A new CEO was hired to revive the floundering Heirloom Watch Corporation. The company had endured operating losses for several years, but confidence was emerging that better times were ahead. The board of directors and shareholders approved a quasi- reorganization for the corporation. The reorganization included devaluing inventory for obsolescence by $213 million and increasing land by $10 million. Immediately before the restatement, at December 31, 2021, Heirloom Watch Corporation's balance sheet appeared as follows (in condensed form): Cash Receivables Inventory Heirloom Watch Corporation Balance Sheet At December 31, 2021 (s in millions) Land Buildings and equipment (net) Liabilities Common stock (640 million shares at $1 par) Additional paid-in capital Retained earnings (deficit) $43 83 463 83 174 $ 846 Required 1 Required 2 $ 483 640 123 (400) Required: 1. Prepare the journal entries appropriate to record the quasi-reorganization on January 1, 2022. 2. Prepare a balance sheet as it would appear immediately after the restatement. $ 846 Complete this question by entering your answers in the tabs below. View transaction list Prepare the journal entries appropriate to record the quasi-reorganization on January 1, 2022. (If no entry is required for a transaction/event, "No journal entry required" in the first account field. Enter your answers in millions (.e., 10,000,000 should be entered as 10).) A new CEO was hired to revive the floundering Heirloom Watch Corporation. The company had endured operating losses for several years, but confidence was emerging that better times were ahead. The board of directors and shareholders approved a quasi- reorganization for the corporation. The reorganization included devaluing inventory for obsolescence by $213 million and increasing land by $10 million. Immediately before the restatement, at December 31, 2021, Heirloom Watch Corporation's balance sheet appeared as follows (in condensed form): Cash Receivables Inventory Heirloom Watch Corporation Balance Sheet At December 31, 2021 (s in millions) Land Buildings and equipment (net) Liabilities Common stock (640 million shares at $1 par) Additional paid-in capital Retained earnings (deficit) $43 83 463 83 174 $ 846 Required 1 Required 2 $ 483 640 123 (400) Required: 1. Prepare the journal entries appropriate to record the quasi-reorganization on January 1, 2022. 2. Prepare a balance sheet as it would appear immediately after the restatement. $ 846 Complete this question by entering your answers in the tabs below. View transaction list Prepare the journal entries appropriate to record the quasi-reorganization on January 1, 2022. (If no entry is required for a transaction/event, "No journal entry required" in the first account field. Enter your answers in millions (.e., 10,000,000 should be entered as 10).)
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Answer rating: 100% (QA)
Answer 1 Date Particulars Debit Credit 2021 Dec 31 Retained Earnings 213000000 Inventory 213000000 T... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-1260481952
10th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
Posted Date:
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