Adverse financial and operating circumstances warrant that Solid Company should undergo a quasi-reorganization at year-end. Inventory with a fair value of P2,000,000 is currently recorded at cost of P2,500,000. * Plant assets with a fair value of P7,000,000 are currently recorded at P8,500,000, net of accumulated depreciation: Individual shareholders contribute P4,000,000 to create additional capital to facilitate the quasi-reorganization. No new shares are issued. * The par value of the share is reduced from P25 to P5. The entity reported the following shareholders' equity prior to the quasi-reorganization: Share capital, P25 par, 100,000 shares outstanding Share premium 2,500,000 1,750,000 Retained earnings (deficit) (3,000,000) After the quasi-organization, what amount should be reported as share premium? a. 2,750,000 b. 3,250,000 c. 3,750,000 d. 1,750,000 000.000.0 QU

Adverse financial and operating circumstances warrant that Solid Company should undergo a quasi-reorganization at year-end. Inventory with a fair value of P2,000,000 is currently recorded at cost of P2,500,000. * Plant assets with a fair value of P7,000,000 are currently recorded at P8,500,000, net of accumulated depreciation: Individual shareholders contribute P4,000,000 to create additional capital to facilitate the quasi-reorganization. No new shares are issued. * The par value of the share is reduced from P25 to P5. The entity reported the following shareholders' equity prior to the quasi-reorganization: Share capital, P25 par, 100,000 shares outstanding Share premium 2,500,000 1,750,000 Retained earnings (deficit) (3,000,000) After the quasi-organization, what amount should be reported as share premium? a. 2,750,000 b. 3,250,000 c. 3,750,000 d. 1,750,000 000.000.0 QU

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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This is under Corp Liquidation and Reorganization
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The solution must be under the GAAP standards
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