Rover Company sustained heavy losses over a period of time and conditions warrant that the entity...

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Rover Company sustained heavy losses over a period of time and conditions warrant that the entity should undergo a quasi-reorganization on December 31, 2022. Inventory with cost of P6,500,000 was recorded on December 31, 2022 at the market value of P6,000,000. Property, plant and equipment were recorded on December 31, 2022 at P12,000,000, net of accumulated depreciation. The sound value was P8,000,000. On December 31, 2022, the share capital is P7,000,000 consisting of 700,000 shares with par value of P10, the share premium is P1,600,000, and the deficit in retained earnings is P900,000. The par value of the share is to be reduced from P10 to P5. Immediately after the quasi-reorganization, what is the shareholders' equity? ● ● ● Rover Company sustained heavy losses over a period of time and conditions warrant that the entity should undergo a quasi-reorganization on December 31, 2022. Inventory with cost of P6,500,000 was recorded on December 31, 2022 at the market value of P6,000,000. Property, plant and equipment were recorded on December 31, 2022 at P12,000,000, net of accumulated depreciation. The sound value was P8,000,000. On December 31, 2022, the share capital is P7,000,000 consisting of 700,000 shares with par value of P10, the share premium is P1,600,000, and the deficit in retained earnings is P900,000. The par value of the share is to be reduced from P10 to P5. Immediately after the quasi-reorganization, what is the shareholders' equity? ● ● ●

Answer rating: 100% (QA)

A quasireorganization is a process in accounting where a company restructures its balance sheet by r... View the full answer