Following Is the Balance Sheet of Tontoe Corporation on July

question 46

Essay

Following is the balance sheet of Tontoe Corporation on July 1, 20X5, just prior to obtaining the required stockholder approval to undergo a quasi-reorganization:
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Required:
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Prepare the journal entries necessary to record the following items that were part of the quasi-reorganization:
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a.Inventory is to be reduced to its fair market value of $90,000.?
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b.The plant and equipment is to be revalued to $70,000 through the Accumulated Depreciation account.?
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c.Par value of the stock is reduced to $1 per share and the deficit is eliminated.?

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Definitions:

Smooth Muscle

A type of muscle found in the walls of hollow organs like the intestines and blood vessels, characterized by its involuntary control and lack of striations.

Pelvic Splanchnic Nerves

Nerves that arise from the sacral spinal nerves, contributing to the autonomic innervation of the pelvic organs.

Parasympathetic Division

Part of the autonomic nervous system responsible for conserving energy and restoring the body to a state of calm after periods of stress or danger.

Preganglionic Neurons

Neurons of the autonomic nervous system that extend from the central nervous system to the autonomic ganglia.