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Mario Company has been incurring losses for several years. On December 31, 2019, the SEC permitted Mario 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. 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?

Mario Company has been incurring losses for several years. On December 31, 2019, the SEC permitted Mario 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. 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?

FINANCIAL ACCOUNTING
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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Mario Company has been incurring losses for several years. On December 31, 2019, the SEC permitted Mario 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.

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?

400,000 5,200,000 8,200,000 200,000 4,450,000 3,200,000 2,150,000 Cash Inventory Property, Plant and Equipment Goodwill Liabilities Share Premium Deficit
Transcribed Image Text:400,000 5,200,000 8,200,000 200,000 4,450,000 3,200,000 2,150,000 Cash Inventory Property, Plant and Equipment Goodwill Liabilities Share Premium Deficit
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