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Prepare journal entry to account for quasi reorganization

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Question - The stockholders' equity section of Brown Co.'s December 31, 20x1, balance sheet consisted of the following: Ordinary shares, 30 par, 10,000 shares authorized and outstanding 300,000 Share premium 150,000 Retained earnings (deficit) (210,000) On January 2, 20x2, Brown put into effect a stockholder-approved quasi-reorganization by reducing the par value of the stock to ?5 and eliminating the deficit against share premium.

Required -

1. Prepare journal entry to account for the quasi reorganization.

2. Compute for the balance in share premium immediately after the quasi reorgnaization.

Reference no: EM132803228

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