Balances in shareholders’ equity accounts at December 31, 2019 are: Share capital, P30 par, 50,000 shares authorized, 40,000 shares outstanding P 1,200,000 Share premium 100,000 Retained earnings (364,000) A quasi-reorganization was approved. Par value is to be P20 per share, equipment written down P101,800, and inventory increased by P5,800. How much share premium from reorganization should initially be recorded?

Balances in shareholders’ equity accounts at December 31, 2019 are: Share capital, P30 par, 50,000 shares authorized, 40,000 shares outstanding P 1,200,000 Share premium 100,000 Retained earnings (364,000) A quasi-reorganization was approved. Par value is to be P20 per share, equipment written down P101,800, and inventory increased by P5,800. How much share premium from reorganization should initially be recorded?

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

Balances in shareholders’ equity accounts at December 31, 2019 are:

Share capital, P30 par, 50,000 shares authorized, 40,000 shares outstanding	P 1,200,000
Share premium	100,000
Retained earnings	(364,000)

A quasi-reorganization was approved. Par value is to be P20 per share, equipment written down P101,800, and inventory increased by P5,800. How much share premium from reorganization should initially be recorded?

Definition Definition Remaining net income of the company after the required dividends are paid to shareholders. This surplus money is usually invested back into the business to expand its business operations or launch a new product.

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