Indigo Products Inc. has the following account balances on March 31, 2023: Inventory Buildings (net) Patents (net) Bank loan payable Common shares, no par value, 10,200 shares outstanding Deficit $375,000 682,500 552,500 328,500 877,200 (1,248,500) In April 2023, management agrees to a financial reorganization. As part of the reorganization creditors are willing to forgive the debt in exchange for 100% of the outstanding shares. It is determined that assets have the following fair values: inventory $152,000, patent $253,500, and buildings $1,107,500. Prepare the required journal entries for the financial reorganization. Use Deficit account. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entri before credit entries. Record journal entries in the order presented in the problem.)

Indigo Products Inc. has the following account balances on March 31, 2023: Inventory Buildings (net) Patents (net) Bank loan payable Common shares, no par value, 10,200 shares outstanding Deficit $375,000 682,500 552,500 328,500 877,200 (1,248,500) In April 2023, management agrees to a financial reorganization. As part of the reorganization creditors are willing to forgive the debt in exchange for 100% of the outstanding shares. It is determined that assets have the following fair values: inventory $152,000, patent $253,500, and buildings $1,107,500. Prepare the required journal entries for the financial reorganization. Use Deficit account. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entri before credit entries. Record journal entries in the order presented in the problem.)

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 98.3C

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