After the quasi-reorganization, the total shareholders' equity should be? Adverse financial and operating circumstances warrant that BLACK PANTHER Corporation undergo a quasi-reorganization on December 31, 2021. The following information may be relevant in accounting for the quasi-reorganization:a. Inventory with a fair value of P1,000,000 is currently recorded in the accounts at its cost of P1,500,000.b. Plant assets with a fair value of P3,000,000 are currently recorded at P4,000,000, net of accumulateddepreciation.c. Unrecorded accounts payable amount to P300,000d. Individual shareholders contribute P1,500,000 to create additional paid-in capital to facilitate thereorganization. No new shares pass to the company's shareholders.e. The par value of the share capital is reduced from P100 to P50.f. Immediately before these events, the shareholders' equity section appears as follows:Share capital, P100 par value, 50,000 sharesShare premiumRetained earnings (deficit)P 5,000,000500,000(2,000,000)

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After the quasi-reorganization, the total shareholders' equity should be?

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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Question

After the quasi-reorganization, the total shareholders' equity should be?

Adverse financial and operating circumstances warrant that BLACK PANTHER Corporation undergo a quasi-
reorganization on December 31, 2021. The following information may be relevant in accounting for the quasi-
reorganization:
a. Inventory with a fair value of P1,000,000 is currently recorded in the accounts at its cost of P1,500,000.
b. Plant assets with a fair value of P3,000,000 are currently recorded at P4,000,000, net of accumulated
depreciation.
c. Unrecorded accounts payable amount to P300,000
d. Individual shareholders contribute P1,500,000 to create additional paid-in capital to facilitate the
reorganization. No new shares pass to the company's shareholders.
e. The par value of the share capital is reduced from P100 to P50.
f. Immediately before these events, the shareholders' equity section appears as follows:
Share capital, P100 par value, 50,000 shares
Share premium
Retained earnings (deficit)
P 5,000,000
500,000
(2,000,000)

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