Ifugao Company accomplished a quasi-reorganization effective December 31, 2021. Immediately prior to the quasi-reorganiz

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Ifugao Company accomplished a quasi-reorganizationeffective December 31, 2021. Immediately prior to thequasi-reorganization, the shareholders’ equity was asfollows:
Share capital, par value of P10; authorized, issued andoutstanding, 400,000 shares
P 4,000,000
Share premium
600,000
Retained earnings (deficit)
(900,000)
Total shareholders’ equity
P 3,700,000
Under the terms of the quasi-reorganization, the parvalue of the share capital was reduced from P10 to P5 and plantasset was written down by P1,200,000.
Immediately after the quasi-reorganization, what is theshareholders’ equity?
ans: 2,500,000 provide a solution