Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
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Chapter 18, Problem 18.13P
(1)
To determine
Quasi Reorganization
Quasi reorganization would be approved by the board of directors and shareholders of the company, when a company is undergoing in financial difficulties, but expecting growth in the future. This provision is used to reduce the deficit or accumulated shortage or debit balance in the
To journalize: The quasi reorganization transactions for Corporation CC.
(2)
To determine
To prepare:
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18. Yemen;s July 1, 2018, statement of financial position after the quasi-reorganization should show total assets ofa. P4,000,000 c. P4,375,000b. P2,500,000 d. P3,875,000
Jade Company has been incurring losses for several years. On December 31, 2019, the SEC permitted Jade to implement a quasi-reorganization after due approval from its shareholders and creditors. Its balance sheet before quasi-reorganization is as follows. [Refer to the figure]The quasi-reorganization plan provides the following:• The PPE shall be revalued at an appraised amount of P8,500,000.• Goodwill shall be written off in full.• Par value shall be reduced by forty percent.• The deficit shall be wiped out firstly from Revaluation Surplus and any unabsorbed amount from Share Premium.
Cash
400,000
Inventory
5,200,000
Property, Plant and Equipment
8,200,000
Goodwill
200,000
Liabilities
4,450,000
Share Premium
3,200,000
Deficit
2,150,000
Questions:
1. How much is the total assets after the quasi-reorganization?
2. How much is the Share Premium after the quasi-reorganization?
3. How much is the Retained Earnings after the quasi-reorganization?
4. After the quasi-reorganization, the total shareholders' equity should be? *
Adverse financial and operating circumstances warrant that BLACK PANTHER Corporation undergo a quasi-
reorganization on December 31, 2021. The following information may be relevant in accounting for the quasi-
reorganization:
a. Inventory with a fair value of P1,000,000 is currently recorded in the accounts at its cost of P1,500,000.
b. Plant assets with a fair value of P3,000,000 are currently recorded at P4,000,000, net of accumulated
depreciation.
c. Unrecorded accounts payable amount to P300,000
d. Individual shareholders contribute P1,500,000 to create additional paid-in capital to facilitate the
reorganization. No new shares pass to the company's shareholders.
e. The par value of the share capital is reduced from P100 to P50.
f. Immediately before these events, the shareholders' equity section appears as follows:
P 5,000,000
Share capital, P100 par value, 50,000 shares
Share premium
Retained earnings…
Chapter 18 Solutions
Intermediate Accounting
Ch. 18 - Identify and briefly describe the two primary...Ch. 18 - Prob. 18.2QCh. 18 - Prob. 18.3QCh. 18 - Prob. 18.4QCh. 18 - Prob. 18.5QCh. 18 - Prob. 18.6QCh. 18 - Prob. 18.7QCh. 18 - What is meant by a shareholders preemptive right?Ch. 18 - Terminology varies in the way companies...Ch. 18 - Most preferred shares are cumulative. Explain what...
Ch. 18 - The par value of shares historically indicated the...Ch. 18 - Prob. 18.12QCh. 18 - How do we report components of comprehensive...Ch. 18 - The balance sheet reports the balances of...Ch. 18 - At times, companies issue their shares for...Ch. 18 - Prob. 18.16QCh. 18 - The costs of legal, promotional, and accounting...Ch. 18 - When a corporation acquires its own shares, those...Ch. 18 - Discuss the conceptual basis for accounting for a...Ch. 18 - The prescribed accounting treatment for stock...Ch. 18 - Brandon Components declares a 2-for-1 stock split....Ch. 18 - What is a reverse stock split? What would be the...Ch. 18 - Suppose you own 80 shares of Facebook common stock...Ch. 18 - Prob. 18.24QCh. 18 - Comprehensive income LO181 Schaeffer Corporation...Ch. 18 - Stock issued LO184 Penne Pharmaceuticals sold 8...Ch. 18 - Prob. 18.3BECh. 18 - Prob. 18.4BECh. 18 - Prob. 18.5BECh. 18 - Retirement of shares LO185 Agee Storage issued 35...Ch. 18 - Treasury stock LO185 The Jennings Group...Ch. 18 - Prob. 18.8BECh. 18 - Prob. 18.9BECh. 18 - Cash dividend LO188 Real World Financials...Ch. 18 - Effect of preferred stock on dividends LO187 The...Ch. 18 - Property dividend LO187 Adams Moving and Storage,...Ch. 18 - Stock dividend LO188 On June 13, the board of...Ch. 18 - Prob. 18.14BECh. 18 - Stock split LO188 Refer to the situation...Ch. 18 - Prob. 18.16BECh. 18 - Comprehensive income LO182 The following is from...Ch. 18 - Prob. 18.2ECh. 18 - Earnings or OCI? LO182 Indicate by letter whether...Ch. 18 - Stock issued for cash; Wright Medical Group LO184...Ch. 18 - Issuance of shares; noncash consideration LO184...Ch. 18 - Prob. 18.6ECh. 18 - Share issue costs; issuance LO184 ICOT Industries...Ch. 18 - Reporting preferred shares LO184, LO187 Ozark...Ch. 18 - Prob. 18.9ECh. 18 - Prob. 18.10ECh. 18 - Retirement of shares LO185 In 2018, Borland...Ch. 18 - Treasury stock LO185 In 2018, Western Transport...Ch. 18 - Treasury stock; weighted-average and FIFO cost ...Ch. 18 - Prob. 18.14ECh. 18 - Prob. 18.15ECh. 18 - Prob. 18.16ECh. 18 - Transact ions affecting retained earnings LO186,...Ch. 18 - Effect of cumulative, nonparticipating preferred...Ch. 18 - Stock dividend LO188 The shareholders equity of...Ch. 18 - Prob. 18.20ECh. 18 - Cash in lieu of fractional share rights LO188...Ch. 18 - Prob. 18.22ECh. 18 - Transact ions affecting retained earnings LO186...Ch. 18 - Profitability ratio LO181 Comparative balance...Ch. 18 - Prob. 18.25ECh. 18 - Various stock transactions; correction of journal...Ch. 18 - Share buybackcomparison of retirement and treasury...Ch. 18 - Reacquired sharescomparison of retired shares and...Ch. 18 - Prob. 18.4PCh. 18 - Shareholders equity transactions; statement of...Ch. 18 - Prob. 18.6PCh. 18 - Prob. 18.7PCh. 18 - Prob. 18.8PCh. 18 - Effect o f preferred stock characteristics on...Ch. 18 - Prob. 18.10PCh. 18 - Stock dividends received on investments;...Ch. 18 - Various shareholders equity topics; comprehensive ...Ch. 18 - Prob. 18.13PCh. 18 - Prob. 18.1BYPCh. 18 - Prob. 18.2BYPCh. 18 - Research Case 184 FASB codification; comprehensive...Ch. 18 - Judgment Case 185 Treasury stock; stock split;...Ch. 18 - Prob. 18.6BYPCh. 18 - Prob. 18.7BYPCh. 18 - Prob. 18.8BYPCh. 18 - Prob. 1CCTC
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