Question

A new CEO was hired to revive the floundering Champion Chemical 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 $124 million and increasing land by $5 million. Immediately prior to the restatement, at December 31, 2018, Champion Chemical Corporation’s balance sheet appeared as follows (in condensed form):

CHAMPION CHEMICAL CORPORATION Balance Sheet At December 31, 2018 $ 29 54 238 54 104 5 479 Cash Receivables Inventory Land Bui

Import a new list Record revaluation of inventory. Record revaluation of land. Record the entry to eliminate a portion of def

Prepare a balance sheet as it would appear immediately after the restatement. (Enter your answers in millions (i.e. 10,000,00

3.

CHAMPION CHEMICAL CORPORATION Balance Sheet At December 31, 2018 $ 29 54 238 54 104 5 479 Cash Receivables Inventory Land Buildings and equipment (net) Liabilities Common stock (360 million shares at $1 par) Paid-in capital-excess of par Retained earnings (deficit) 270 360 69 (2201 5 479 Required 1. Prepare the journal entries appropriate to record the quasi reorganization on January 1, 2019. 2. Prepare a balance sheet as it would appear immediately after the restatement.
Import a new list Record revaluation of inventory. Record revaluation of land. Record the entry to eliminate a portion of deficit against 1 2 3 available additional paid in capital. Record the entry to eliminate the remainder of the 4 deficit against common stock.
Prepare a balance sheet as it would appear immediately after the restatement. (Enter your answers in millions (i.e. 10,000,000 should be entered as 10).) CHAMPION CHEMICAL CORPORATION Balance Sheet January 1, 2019 Assets Current Assets: Total Current Assets Total Assets Liabilities and stockholders' equity Stockholders' Equity: Paid-in capital-excess of par Retained earnings (deficit) Total Stockholders' Equity Total Liabilities and Stockholders' Equity
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Answer #1

Champion Chemical Corporatio Journal Entry DateParticulars ned Earnings D Debit n Credit ln ilns) Millions) $124.00 1,2019 To

Champion Chemical Corporatio Balance Sheet January 1,2019 (lmmediately after the Restatement) In Millions) Particulars ASSETS

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