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30. Adverse financial and operating circumstances warrant that an entity should undergo a quasi-reorganization at year-end. *Inventory with a fair value of P1,000,000 is currently recorded in the accounts at cost of P1,500,000. *Plant assets with a fair value of P3,000,000 are currently recorded at P4,000,000 net of accumulated depreciation. *Unrecorded accounts payable amount to P300,000. *Individual shareholders contribute P1,500,000 to create additional paid-in capital to facilitate the reorganization. No new shares are issued to the shareholders. *The par value of the share capital is reduced from P100 to P50. * Immediately before these events, the entity reported the following shareholders' equity: Share capital, P100 par value, 50.000 shares Share premium Retained earnings (deficit) 5,000,000 500,000 (2,000,000) After the quasi-reorganization, what is the total shareholders' equity? a. 3,200,000 b. 2,500,000 c. 1,700,000 d. 1,000,000

30. Adverse financial and operating circumstances warrant that an entity should undergo a quasi-reorganization at year-end. *Inventory with a fair value of P1,000,000 is currently recorded in the accounts at cost of P1,500,000. *Plant assets with a fair value of P3,000,000 are currently recorded at P4,000,000 net of accumulated depreciation. *Unrecorded accounts payable amount to P300,000. *Individual shareholders contribute P1,500,000 to create additional paid-in capital to facilitate the reorganization. No new shares are issued to the shareholders. *The par value of the share capital is reduced from P100 to P50. * Immediately before these events, the entity reported the following shareholders' equity: Share capital, P100 par value, 50.000 shares Share premium Retained earnings (deficit) 5,000,000 500,000 (2,000,000) After the quasi-reorganization, what is the total shareholders' equity? a. 3,200,000 b. 2,500,000 c. 1,700,000 d. 1,000,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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30. Adverse financial and operating circumstances warrant that an entity should undergo a quasi-reorganization at year-end. *Inventory with a fair value of P1,000,000 is currently recorded in the accounts at cost of P1,500,000. *Plant assets with a fair value of P3,000,000 are currently recorded at P4,000,000 net of accumulated depreciation. *Unrecorded accounts payable amount to P300,000. *Individual shareholders contribute P1,500,000 to create additional paid-in capital to facilitate the reorganization. No new shares are issued to the shareholders. *The par value of the share capital is reduced from P100 to P50. * Immediately before these events, the entity reported the following shareholders' equity: Share capital, P100 par value, 50.000 shares Share premium Retained earnings (deficit) 5,000,000 500,000 (2,000,000) After the quasi-reorganization, what is the total shareholders' equity? a. 3,200,000 b. 2,500,000 c. 1,700,000 d. 1,000,000
Transcribed Image Text:30. Adverse financial and operating circumstances warrant that an entity should undergo a quasi-reorganization at year-end. *Inventory with a fair value of P1,000,000 is currently recorded in the accounts at cost of P1,500,000. *Plant assets with a fair value of P3,000,000 are currently recorded at P4,000,000 net of accumulated depreciation. *Unrecorded accounts payable amount to P300,000. *Individual shareholders contribute P1,500,000 to create additional paid-in capital to facilitate the reorganization. No new shares are issued to the shareholders. *The par value of the share capital is reduced from P100 to P50. * Immediately before these events, the entity reported the following shareholders' equity: Share capital, P100 par value, 50.000 shares Share premium Retained earnings (deficit) 5,000,000 500,000 (2,000,000) After the quasi-reorganization, what is the total shareholders' equity? a. 3,200,000 b. 2,500,000 c. 1,700,000 d. 1,000,000
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