Cindy/201850046

E10-8

a. Journal Entries
Loss on Transfer Asset $52,700 Computation :
Allowance for Uncollectibles $8,700 ( $48.700 - $40.000 )
Property and Equipment $24,000 ($142.000 - $118.000 )
Goodwill $20,000

Retained Earnings $52,700

Loss on Transfer Asset $52,700

Common Stock ( $20 ) $200,000 ($20 × 10,000)

Common Stock ( $4 ) $40,000 ($4 × 10,000)
Reorganization Capital $160,000

10% Bonds Payable $130,000

Loss on Restructuring of Debt $24,000
Common Stock $24,000 (6,000 shares × $4)
8% Bonds Payable $130,000

Reorganization Capital $134,000 ($81,300 + $52,700)

Retained Earnings $134,000

b. Balance Sheet

Crane Company Balance Sheet

December 31. 2015

Cash $33,000
Accounts Receivable $52,500
Less : Allowance For Uncollectible -$12,500 $40,000
Inventory $71,000
Property and Equipment $118,000
TOTAL ASSETS $262,000

Accounts Payable $66,000

8% Bonds Payable, due 6/30/22 $130,000
Common Stock, $4 Par, 16,000 Shares $64,000
Reorganization Capital * $2,000
TOTAL EQUITIES $262,000
*($160,000 – $24,000 - $134,000)