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Bacolod Company approved the following reorganization at year-end: 1. The preference share capital is to be exchanged fo P2,000,000 of 10% debenture bonds. 2. Goodwill is to be written off. 3. The property, plant and equipment are appraised by independent expert at a replacement cost of P12,000,000 The SEC approved the revaluation of the property, plant and equipment to give effect to the reorganization. 4. The resulting deficit is to be offset against the revaluation surplus. Statement of financial position at year-end Assets Cash 425,000 1,325,000 Other current assets Property, plant and equipment Less accumulated depreciation Goodwill 8,000,000 2,000,000 6,000,000 500,000 Total assets 8,250,000 Liabilities and Shareholders' Equity Current liabilities Preference share capital, 12% cumulative, P100 par Ordinary share capital, 50,000 shares, P100 par Share premium Retained earnings 2,000,000 1,500,000 5,000,000 750,000 ( 1,000,000) Total liabilities and shareholders' equity 8,250,000

Bacolod Company approved the following reorganization at year-end: 1. The preference share capital is to be exchanged fo P2,000,000 of 10% debenture bonds. 2. Goodwill is to be written off. 3. The property, plant and equipment are appraised by independent expert at a replacement cost of P12,000,000 The SEC approved the revaluation of the property, plant and equipment to give effect to the reorganization. 4. The resulting deficit is to be offset against the revaluation surplus. Statement of financial position at year-end Assets Cash 425,000 1,325,000 Other current assets Property, plant and equipment Less accumulated depreciation Goodwill 8,000,000 2,000,000 6,000,000 500,000 Total assets 8,250,000 Liabilities and Shareholders' Equity Current liabilities Preference share capital, 12% cumulative, P100 par Ordinary share capital, 50,000 shares, P100 par Share premium Retained earnings 2,000,000 1,500,000 5,000,000 750,000 ( 1,000,000) Total liabilities and shareholders' equity 8,250,000

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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1. How much is the cost of the deficit to be wiped out?

2.How much is the balance of Revaluation Surplus after reorganization?

3. How much is the total asset after reorganization?

4. How much is the total shareholder's equity after reorganization?

Bacolod Company approved the following reorganization at Problem 23-8 Bacolod Company approved the following reorganization year-end: 1. The preference share capital is to be exchanged for P2,000,000 of 10% debenture bonds. 2. Goodwill is to be written off. 3. The property, plant and equipment are appraised hy independent expert at a replacement cost of P12,000,000 The SEC approved the revaluation of the property, plant and equipment to give effect to the reorganization. 4. The resulting deficit is to be offset against the revaluation surplus. Statement of financial position at year-end Assets Cash Other current assets Property, plant and equipment Less accumulated depreciation Goodwill 425,000 1,325,000 8,000,000 2,000,000 6,000,000 500,000 Total assets 8,250,000 Liabilities and Shareholders' Equity Current liabilities Preference share capital, 12% cumulative, P100 par Ordinary share capital, 50,000 shares, P100 par Share premium Retained earnings 2,000,000 1,500,000 5,000,000 750,000 ( 1,000,000) Total liabilities and shareholders' equity 8,250,000
Transcribed Image Text:Bacolod Company approved the following reorganization at Problem 23-8 Bacolod Company approved the following reorganization year-end: 1. The preference share capital is to be exchanged for P2,000,000 of 10% debenture bonds. 2. Goodwill is to be written off. 3. The property, plant and equipment are appraised hy independent expert at a replacement cost of P12,000,000 The SEC approved the revaluation of the property, plant and equipment to give effect to the reorganization. 4. The resulting deficit is to be offset against the revaluation surplus. Statement of financial position at year-end Assets Cash Other current assets Property, plant and equipment Less accumulated depreciation Goodwill 425,000 1,325,000 8,000,000 2,000,000 6,000,000 500,000 Total assets 8,250,000 Liabilities and Shareholders' Equity Current liabilities Preference share capital, 12% cumulative, P100 par Ordinary share capital, 50,000 shares, P100 par Share premium Retained earnings 2,000,000 1,500,000 5,000,000 750,000 ( 1,000,000) Total liabilities and shareholders' equity 8,250,000
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