Quiz Reorganization
Quiz Reorganization
Quiz Reorganization
Pooh, Rita, and Company showed the following data with respect to a
matured obligation:
The entity entered into an agreement with the creditor for the issuance
of share capital in full settlement of the mortgage.
The agreement provided for the issue of 35,000 shares with par value of
P100. The share is currently quoted at P120. The fair value of the
liability is P4,500,000.
2. A
1. If the fair value of the share capital is used for the equity swap,
the entry to record the equity swap would include a
2. If the fair value of the liability is used for the equity swap,
the entry to record the equity swap would include a
3. If the carrying amount of the liability is used for the equity swap,
the entry to record the equity swap would include a
a. 1,390,590 c. 840,000
b. 1,290,590 d. 940,000
FOR ITEMS 6 TO 10
Gawat Company approved the following reorganization at year-end:
1. The preference share capital is to be exchanged for P2,000,000
of 10% debenture bonds.
2. Goodwill is to be written off.
3. The PPE are appraised by independent expert at a replacement
cost of P12,000,000. The SEC approved the revaluation of the PPE.
4. The resulting deficit is to be offset against the revaluation surplus.
Assets
Cash 400,000.00
Othe current assets 1,300,000.00
Property, Plant, and Equipment 8,000,000.00
Accumulated Depreciation - 2,000,000.00
Goodwill 500,000.00 6. C
Total Assets 8,200,000.00
7. D
a. 1,050,000 c. 2,050,000
b. 2,000,000 d. 0
a. 4,000,000 c. 950,000
b. 3,000,000 d. 1,950,000
a. 13,700,000 c. 14,200,000
b. 11,700,000 d. 10,700,000
a. 4,700,000 c. 7,700,000
b. 6,700,000 d. 5,700,000
Mortgage Payable 4,000,000.00
Accrued Interest Payable 300,000.00
Gain on debt resturing 100,000.00
Share Capital 3,500,000.00
Share Premium 700,000.00
PPE 4,000,000.00
Accumulated Depreciation 1,000,000.00
Revaluation Surplus 3,000,000.00