2-27. Red, Inc. has experienced several poor earnings and has several assets on its books that are undervalued. It desires to revalue its assets and eliminate the deficit. At December 31, 2020, the company owns the following identifiable assets: Accumulated Depreciation Book Value P1.OM 5.OM 4.0M Cost P1.OM 5.0M 7.5M Fair Value P0.7M 6.5M 5.OM Inventory Land Buildings Machinery & Equipment P3.5M 1.5M 3.5M 2.OM 2.2M The statement of financial position on December 31, 2020, reported a deficit of P2,000,000. REQUIRED: Journal entries to record the quasi-reorganization. 2-28. The Skinny Red Company has a deficit in retained earnings of P1,000,000. Business appears to be turning around, so the president wants the company to go through a quasi- reorganization. The statement of financial position of the company prior to the reorganization contains the following information: Current assets P 500,000 Land 1,500,000 Buildings 5,000,000 Liabilities 1,000,000 Accumulated depreciation 1,000,000 Ordinary share capital, P20 par value 6,000,000 Retained earnings (Deficit) (1,000,000) 156