What is the reduction in total par value of shares to fully eliminate the deficit?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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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