The following information may be relevant in accounting for the quasi reorganization.
· Inventory with a net realizable value of P5,000,000 is currently recorded in the accounts at its cost of P7,000,000.
· Plant assets with a recoverable amount P20,000,000 are currently recorded at P24,000,000 net of accumulated depreciation.
· Unrecorded accounts payable amount to P3,000,000.
· Individual shareholders contribute P5,000,000 to create share premium to facilitate the reorganization. No new outstanding shares pass to the company's shareholders.
· The par value of the ordinary share is reduced from P100 to P50.
· Immediately before these events, the shareholders’ equity section appears as follows.
· Share capital, P100 par value, 500,000 shares P50,000,000
· Share premium 5,000,000
· Retained earnings (deficit) (15,000,000)
Compute the balance of share premium /after) the quasi-reorganization.
· Inventory with a net realizable value of P5,000,000 is currently recorded in the accounts at its cost of P7,000,000.
· Plant assets with a recoverable amount P20,000,000 are currently recorded at P24,000,000 net of accumulated depreciation.
· Unrecorded accounts payable amount to P3,000,000.
· Individual shareholders contribute P5,000,000 to create share premium to facilitate the reorganization. No new outstanding shares pass to the company's shareholders.
· The par value of the ordinary share is reduced from P100 to P50.
· Immediately before these events, the shareholders’ equity section appears as follows.
· Share capital, P100 par value, 500,000 shares P50,000,000
· Share premium 5,000,000
· Retained earnings (deficit) (15,000,000)
Compute the balance of share premium /after) the quasi-reorganization.
