At the beginning of current year, Lauretta Company reported the following shareholders' equity: Share capital = 1,500,000; Share premium = 3,000,000; Retained earnings = 2,000,000. The entity had 400,000 authorized shares of P5 par value, of which 300,000 shares were issued and outstanding. During the year, the entity acquired 50,000 shares for P10 per share to be held as treasury. The shares were originally issued at P8 per share. The entity used the cost method to account for treasury shares. At year-end, the entity declared and distributed a property dividend of inventory. The inventory had a P750,000 carrying amount and a P1,000,000 fair value. The net income for 2019 was P2,500,000. What amount should be reported as unappropriated retained earnings at year-end?
At the beginning of current year, Lauretta Company reported the following shareholders' equity: Share capital = 1,500,000; Share premium = 3,000,000; Retained earnings = 2,000,000. The entity had 400,000 authorized shares of P5 par value, of which 300,000 shares were issued and outstanding. During the year, the entity acquired 50,000 shares for P10 per share to be held as treasury. The shares were originally issued at P8 per share. The entity used the cost method to account for treasury shares. At year-end, the entity declared and distributed a property dividend of inventory. The inventory had a P750,000 carrying amount and a P1,000,000 fair value. The net income for 2019 was P2,500,000. What amount should be reported as unappropriated retained earnings at year-end?
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