Christelle Company has incurred heavy losses since the inception of operations. The board of directors voted to implement a quasi. reorganization, subject to approval of shareholders. Immediately prior to the restatement, the shareholders' equity was as follows: Share capital, P100 par, 500,000 shares Share premium 50,000,000 5,000,000 Retained earnings (deficit) (8,000,000) The shareholders approved the quasi-reorganization to be accomplished by: Reduction of inventory Reduction of property, plant and equipment Writeoff of goodwill -2,000,000 4,000,000 1,000,000 Appropriate adjustment is made to the capital structure against share premium first and any remaining deficit against the share capital account. To implement the quasi-reorganization, the share capital account should be reduced by what amount? a. 10,000,000 b. 15,000,000 c. 20,000,000 d. 3,000,000

Christelle Company has incurred heavy losses since the inception of operations. The board of directors voted to implement a quasi. reorganization, subject to approval of shareholders. Immediately prior to the restatement, the shareholders' equity was as follows: Share capital, P100 par, 500,000 shares Share premium 50,000,000 5,000,000 Retained earnings (deficit) (8,000,000) The shareholders approved the quasi-reorganization to be accomplished by: Reduction of inventory Reduction of property, plant and equipment Writeoff of goodwill -2,000,000 4,000,000 1,000,000 Appropriate adjustment is made to the capital structure against share premium first and any remaining deficit against the share capital account. To implement the quasi-reorganization, the share capital account should be reduced by what amount? a. 10,000,000 b. 15,000,000 c. 20,000,000 d. 3,000,000

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter5: Corporations: Earnings & Profits And Dividend Distributions

Section: Chapter Questions

Problem 31P

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An entity was reporting losses for several years. The board of directors and shareholders approved a quasi-reorganization. The reorganization included reducing inventory and land by P300,000 and P800,000 respectively. Immediately before the restatement, the entity had the following balances: Share capital (320,000 issued shares, P10 par) - 3,200,000 Share premium - 800,000 Retained eamings (deficit) - (400,000) What is the reduction in total par value of shares to fully eliminate the deficit?
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Please answer in good accounting form. Thankyou After the quasi-reorganization, the total shareholders' equity should be?
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D
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