Recapitalization is effected, each shareholder receiving 2 shares of new no-par with a stated value of P50 for each share owned. B. A stock split is effected, each shareholder receiving 5 shares, par value P30, for each share owned. C. A recapitalization is effected, each shareholder receiving 1 share of new P100 par value of each share owned.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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PROBLEM 4
Divina Company reported the following capital balances:
Share capital, 20,000 shares, P150 par P 3,000,000
Share premium 200,000
Retained earnings 1,500,000
Divina is considering changing its capital structure through any of the following means:
A. Recapitalization is effected, each shareholder receiving 2 shares of new no-par with a stated value of P50 for each share owned.
B. A stock split is effected, each shareholder receiving 5 shares, par value P30, for each share owned.
C. A recapitalization is effected, each shareholder receiving 1 share of new P100 par value of each share owned.
D. Shareholders donate 10% of their shares to the company and these are formally retired.
E. A recapitalization is effected, each shareholder receiving 4 new shares of P50 par value for each share owned.
F. The par value of shares is to be reduced to P50.
 
 
1. Compute for the total share premium after recapitalization under A.
2. Compute for the total share premium after recapitalization under B.
3. Compute for the total share premium after recapitalization under C. 
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