Problem 17-23 (AICPA Adapted) Current conditions warrant that the Peach Company should undergo a quasi-reorganization on December 31, 2013. Selected items prior to the quasi-reorganization are: 1. Inventory was recorded on December 31, 2013, at cost of P3,250,000. The fair value of the inventory was P3,000,000. 2. Property, plant and equipment were recorded at December 31, 2013, at P6,000,000 net of the accumulated depreciation. The fair value of the property was P5,000,000 3. The par value of the share capital is to be reduced from P10 to P5 per share. Shareholders' equity consisted of: Share capital, par value P10 per share, authorized, issued and outstanding 350,000 shares Share premium Retained earnings (deficit) 3,500,000 800,000 (450,000) 3,850,000 4. The resulting deficit balance is to be offset against the share premium Required: a. Prepare journal entries to give effect to the reorganization b. Present the shareholders' equity after the reorganization