14. ABC Corporation'sperformance during the lastthree years had not beenfavorable resulting to adeficit of P950,000 atDecember 31, 2012. Thecompany, with the approvalof the shareholders, decidedto eliminate the deficitthrough a quasi-reorganization which wouldbe effected as follows: Thecompany's 200,000, P20 parordinary share capitaloriginally issued at anaverage price of P22 wouldbe reissued with par value ofP15. Immediately after quasi-reorganization, what wouldbe the balance of additionalpaid-in capital?O a. P1,400,000O b. P1,000,000c. P600,000d. P450,000

Reorganisation of financial statements means restructuring or modification that is needed in…

Answered: P15. Immediately reorganization, what…

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter5: Corporations: Earnings & Profits And Dividend Distributions

Section: Chapter Questions

Problem 31P

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ABC Corporation’s performance during the last three years had not been favorable resulting to a deficit of P950,000 at December 31, 2020. The company, with the approval of the shareholders, decided to eliminate the deficit through quasi- reorganization which would be effected as follows: The company’s 200,000, P20 par ordinary share capital originally issued at an average price of P22 would be reissued with par value of P15. Immediately after the quasi-reorganization, what would be the balance of share premium? A.P 450,000 B.P 600,000 C.P 1,000,000 D.P 1,400,000
ABC Corporation’s performance during the last three years had not been favorable resulting to a deficit of P950,000 at December 31, 2020. The company, with the approval of the shareholders, decided to eliminate the deficit through quasi- reorganization which would be effected as follows: The company’s 200,000, P20 par ordinary share capital originally issued at an average price of P22 would be reissued with par value of P15. Immediately after the quasi-reorganization, what would be the balance of share premium? P 450,000 P 600,000 P 1,000,000 P 1,400,000
Deficit Corporation has incurred losses from operations for many years. The board of directors applied for a quasi-reorganization in the SEC and eventually acquired an approval on August 31, 2020. Deficit’s balance sheet on this date is presented below (SEE PICTURE BELOW):As part of the quasi-reorganization process, PPE will be reduced by P1,750,000 while other assets be decreased by P750,000. Par value of the ordinary shares will be reduced by P5 per share. How much is the balance of shareholder’s equity after the quasi-reorganization? a. P4,000,000 b. P8,000,000 c. P9,000,000 d. P5,000,000
The shareholders’ equity section of the M&M Co. as of December 31, 2019 consisted of the following: Share capital (P30 par) P3,000,000; Share premium P1,900,000; Accumulated profits and losses (P2,000,000). On January 1, 2020 M&M Co. put into effect a shareholder approved quasi reorganization by reducing the par value of the shares to P5 and eliminating the deficit against share premium. What amount should M&M Co. report as share premium immediately after the quasi reorganization? * P600,000 P1,500,000 P1,900,000 P4,000,000 None of the above
Assuming that the quasi reorganization shall be accomplished as follows: Property, plant and equipment are to be reduced to their fair market value of P800,000. Inventories are to be written down by P50,000. • Unaccrued obligation shall be recognized at P150,000. • The par value of ordinary Shares will be reduced to P5. 1. What is the balance of the retained earnings account as of 31 December 2019? Assuming that the quasi reorganization shall be accomplished as follows: Property, plant and equipment are to be reduced to their fair market value of P800,000. Inventories are to be written down by P50,000. • Unaccrued obligation shall be recognized at P150,000. • The par value of ordinary Shares will be reduced to P5. 2. What is the balance of the retained earnings account as of 31 December 2019?
ABC Company has incurred losses continuously since its inception. At the recommendation of one its directors, the board of directors agreed to implement quasi-reorganization, through reduction of par value which was also agreed by its shareholders. Before effecting the quasi-reorganization, the following are the balances in the Shareholder's Equity: Ordinary share capital, P 100 par P 25,000,000 Share Premium 10,000,000 Accumulated losses (15,000,000) Also, part of the restatement of assets are reduction in the value of the building of P 500,000 and P 200,000 write down in the value of the inventory. The company also recognized unrecorded liabilities of P 300,000. To eliminated the deficit, ABC should reduce the ordinary share capital by
On December 31, 2021, the Bobo company presented the following information: Ordinary share capital, P50 par P6,000,000 Share premium 300,000 Retained earnings (1,200,000) The company decided to undergo quasi reorganization. As a result, the company’s property, plant and equipment with cost of P8,000,000 and book value of P4,000,000 has recoverable amount of P3,000,000. Also, inventory would be written down by P300,000. The company will redeem its P50 par value ordinary shares and will issue equal number of ordinary shares with P30 par value. Based on the foregoing, determine balance of share premium after the quasi reorganization.
Quest Company is threatened with bankruptcy due to its inability to meet interest payments and fund requirements to retire P6,000,000 note payable with accrued interest payable of P600,000. The entity has entered into an agreement with the creditor to exchange equity instruments for the liability.The terms of the exchange are 300,000 ordinary shares wit P5 par value and P10 market value, and 25,000 preference shares with P10 par value and P60 market value. 1. What is the gain on the extinguishment of the note payable? 2. What is the total share premium from the issuance of the preference and ordinary shares?
Concord Corporation has $3070000 of short-term debt it expects to retire with proceeds from the sale of 86000 shares of common stock. There is no contractual agreement to retire the debt with the stock sale proceeds. If the stock is sold for $25 per share subsequent to the balance sheet date, but before the balance sheet is issued, what amount of short-term debt could be excluded from current liabilities? $920000. $3070000. $2150000. $0, No contractual agreement to retire the debt with stock proceeds.
4. On January 1, 2021, Evan Co. purchased all of the common stock of Kristopher Corp. by issuing 15,000 shares of $1 par value common stock. Evan’s shares had a $30 per share fair value. On that date, Kristopher reported a net book value of $275,000. However, its equipment (with a five-year remaining life) was undervalued by $60,000 in the company’s accounting records. Any excess of consideration transferred over fair value of assets and liabilities is assigned to an unrecorded patent to be amortized over ten years. During 2021, Kristopher earned net income of $155,000 and paid dividends of $40,000. Kristopher’s net income and dividends for 2022 were $178,000 and $65,000, respectively. Required: Calculate the balance in the investment account on the books of Evan Co. at the end of 2022 under each of the following methods: a. equity method b. partial equity method c. initial value method. .
28 On February 28, 2022, P Corp. purchased 80% of S Co.’s P10 par ordinary shares for P986,000. On this date, the carrying amount of S’s net assets was P1,000,000. The fair values of S Co.’s identifiable assets and liabilities were the same as their carrying amounts except for inventory which is overvalued by P15,000 and plant assets (net), which were P120,000 in excess of the carrying amount. The estimated remaining life of the asset is 5 years. For the year ended December 31, 2022, S had net income of P354,000 and paid cash dividends to P Corp. of P112,000 (all coming from post-acquisition Retained Earnings). Loss on impairment of goodwill in 2022 amounted to P20,000. P Corp. uses the fair value method in measuring non-controlling interest. Revenues were earned evenly throughout the year Determine the non-controlling interest in net asset of subsidiary on December 31, 2022.
8. On January 2, 2020, Tuao Company purchased 10% of Abulug Company’s outstanding ordinary shares for P20,000,000. Tuao is the largest single shareholder in Abulug and this gives Tuao the power to participate in the financial and operating policy decisions of the Abulug but is not control or joint control over those policies. Abulug reported profit of P10,000,000 and paid dividend of P4,000,000. What should be the balance in Tuao’s investment in Abulug Company at the end of 2020? Group of answer choices P20,000,000 P21,000,000 P21,400,000 P20,600,000

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P15. Immediately reorganization, what would be the balance of additional paid-in capital? O a. P1,400,000 O b. P1,000,000 O c. P600,000 d. P450,000 after quasi-