What should be the balance in abc corporation share premium

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Problem 1: On July 1, 2019, ABC Corporation has 250,000 shares of P10 par ordinary shares outstanding and the market price of the stock is P12 per share. On the same date, ABC Corporation declared a 1-for-2 reverse split. The par value of the share was increased from P10 to P20 and one new P20 par value was issued for every two P10 par shares outstanding. Immediately before the 1-for-2 reverse share split, ABC Corporation share premium was P480,000. What should be the balance in ABC Corporation's share premium account immediately after the reverse share split is declared?

a. P730,000
b. P980,000
c. P480,000
d. zero

 

Reference no: EM132803953

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