Kansas City Corporation holds three assets when it comes out of Chapter 11 bankruptcy: The…

Kansas City Corporation holds three assets when it comes out of Chapter 11 bankruptcy:

The company has a reorganization value of $600,000.

a. Describe the rules to determine whether to apply fresh start accounting to Kansas City.

b. If fresh start accounting is appropriate, how will this company’s assets be reported?

c. If a Goodwill account is recognized in a reorganization, where should it be reported? What happens to this balance?