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What should be the balance in share premium account

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Problem 1: On July 1, 2019, Charlene Mae has 200,000 shares of P10 par ordinary share outstanding and the market price of the stock is P12 per share. On the same date, Charlene Mae declared a 1 to 2 reverse stock split. The par value of the shares was increased from P10 to 20 and one new P20 par share was issued for each two P10 par shares outstanding . Immediately before the 1-for 2 reverse stock split, Charlene Mae's share premium was P450,000. What should be the balance in her share premium account immediately after the reverse stock split is effected?

a. P650,000
b. P450,000
c. other answer
d. P850,000
e. P0

Reference no: EM132766897

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