Dexter Company has sustained heavy losses over a period time and conditions warrant that Dexter undergo a quasi re-organization at December 31, 2019. Selected balance sheet items prior write down and quasi-reorganization are as follows: • Property, plant and equipment were recorded in the accounting records at December 31, 2019, at P12,000,000, net of accumulated depreciation. The recoverable value is P8,000,000. • Stockholders' equity on December 31, 2019 was as follows: Ordinary share, par value P10 per share authorized, issued and outstanding 700,000 shares- P7,000,000; Share premium P1,600,000; Retained earnings (deficit)- (P600,000) • Under the terms of the quasi re-organization, the par value of the ordinary share is to be reduced from P10 per share to P5 per share Immediately after the quasi-reorganization has been accomplished, the total stockholders' equity should be:
Dexter Company has sustained heavy losses over a period time and conditions warrant that Dexter undergo a quasi re-organization at December 31, 2019. Selected
• Property, plant and equipment were recorded in the accounting records at December 31, 2019, at P12,000,000, net of
•
P1,600,000;
• Under the terms of the quasi re-organization, the par value of the ordinary share is to be reduced from P10 per share to P5 per share
Immediately after the quasi-reorganization has been accomplished, the total stockholders' equity should be:
Step by step
Solved in 2 steps
