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A Company with a Substantial Deficit Undertakes a Quasi-Reorganization

Question 50

Multiple Choice

A company with a substantial deficit undertakes a quasi-reorganization. Certain assets will be written down to their present fair market value. Liabilities will remain the same. How would the entries to record the quasi-reorganization affect each of the following? Contributed Capital Retained Earnings


A) Increase Decrease
B) Decrease No effect
C) Decrease Increase
D) No effect Increase

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