What is the reduction in total par value of shares to fully eliminate the deficit?
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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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- This is under Corp Liquidation and ReorganizationOn December 31, 2021, the company presented the following information: Ordinary share capital, P50 par P6,000,000 Share premium 300,000 Retained earnings (1,200,000) The company decided to undergo quasi reorganization. As a result, the company's property, plant and equipment with cost of P8,000,000 and book value of P4,000,000 has recoverable amount of P3,000,000. Also, inventory would be written down by P300,000. The company will redeem its P50 par value ordinary shares and will issue equal number of ordinary shares with P30 par value. Based on the foregoing, determine balance of share premium after the quasi reorganizationOn January 1, 20X3, Guild Corporation reported total assets of P470,000, liabilities of P270,000, and stockholders’ equity of P200,000. At that date, Bristol Corporation reported total assets of P190,000, liabilities of P135,000, and stockholders’ equity of P55,000. Following lengthy negotiations, Guild paid Bristol’s existing shareholders P44,000 in cash for 80 percent of the voting common shares of Bristol. Immediately after Guild purchased the Bristol shares, What amount of stockholders’ equity was reported in the consolidated balance sheet? 255,000 244,000 211,000
- Logan Corp. has incurred losses from operations for many years. At the recommendation of the newly hired president, the board of directors noted to implement a quasi-reorganization, subject to the stockholders' and creditors' approval. Immediately, prior to the quasi-reorganization, on June 30, 2016, Logan's balance sheet was as follows: Assets Current assets P1,375,000 Property, plant and equipment 3,375,000 Other noncurrent assets 500,000 Total assets P5,250,000 Liabilities and Stockholders' Equity Total liabilities P1,500,000 Ordinary shares, P10 par value…For which of the corporate distributions listed below may loss be recognized? Question options: A dividend of property with a basis of $500,000 and a value of $450,000 Securities with a value of $500,000 and a basis of $550,000 distributed to its shareholders pro-rata as part of a complete liquidation; the securities were bought by the corporation three years ago with internal funds. Land with a value of $400,000 and a basis of $470,000 distributed to a 70% shareholder pursuant to a complete liquidation; the land was contributed by the same shareholder 20 months before the liquidationABC Company is in a capital deficiency position and is considering the possibility of liquidation. An analysis of the assets and liabilities of the entity is provided: Assets at net realizable value (pledged against liabilities of P150,000) 250,000 Assets at net realizable value (pledged against liabilities of P260,000) 100,000 Assets at net realizable value (not pledged against any liabilities) 160,000 Liabilities with priority 85,000 Unsecured creditors 400,000 Round off the estimated recovery percentage to XX.XX%, if needed. How much is the estimated payment to partially secured creditors?
- Smith Corporation has gone through bankruptcy and is ready to emerge as a reorganized entity on December 31, 2017. On this date, the company has the following assets (fair value is based on dis-counting the anticipated future cash flows):The company has a reorganization value of $800,000.Smith has 50,000 shares of $10 par value common stock outstanding. A deficit retained earnings balance of $670,000 also is reported. The owners will distribute 30,000 shares of this stock as part of the reorganization plan.The company’s liabilities will be settled as follows:• Accounts payable of $180,000 (existing at the date on which the order for relief was granted) will be settled with an 8 percent, two-year note for $35,000.• Accounts payable of $97,000 (incurred since the date on which the order for relief was granted) will be paid in the regular course of business.• Note payable—First Metropolitan Bank of $200,000 will be settled with an 8 percent, five-year note for $50,000 and 15,000 shares of…Assuming that the quasi reorganization shall be accomplished as follows: Property, plant and equipment are to be reduced to their fair market value of P800,000. Inventories are to be written down by P50,000. • Unaccrued obligation shall be recognized at P150,000. • The par value of ordinary Shares will be reduced to P5. 1. What is the balance of the retained earnings account as of 31 December 2019? Assuming that the quasi reorganization shall be accomplished as follows: Property, plant and equipment are to be reduced to their fair market value of P800,000. Inventories are to be written down by P50,000. • Unaccrued obligation shall be recognized at P150,000. • The par value of ordinary Shares will be reduced to P5. 2. What is the balance of the retained earnings account as of 31 December 2019?Logan's July 1 balance sheet after the quasi-reorganization should show total assets of _________
- ABC Corporation’s performance during the last three years had not been favorable resulting to a deficit of P950,000 at December 31, 2020. The company, with the approval of the shareholders, decided to eliminate the deficit through quasi- reorganization which would be effected as follows: The company’s 200,000, P20 par ordinary share capital originally issued at an average price of P22 would be reissued with par value of P15. Immediately after the quasi-reorganization, what would be the balance of share premium? P 450,000 P 600,000 P 1,000,000 P 1,400,000On January 1, 20X3, Guild Corporation reported total assets of P470,000, liabilities of P270,000, and stockholders’ equity of P200,000. At that date, Bristol Corporation reported total assets of P190,000, liabilities of P135,000, and stockholders’ equity of P55,000. Following lengthy negotiations, Guild paid Bristol’s existing shareholders P44,000 in cash for 80 percent of the voting common shares of Bristol. Immediately after Guild purchased the Bristol shares, what amount of total assets was reported in the consolidated balance sheet? P616,000 P470,000 P650,000