Gringo Company is completing the preparation of the financial statements for the year ended December 31, 2022. The financial statements are authorized for issue on March 31, 2023: On March 15, 2023, a dividend of P3,000,000 was declared and a contractual profit share payment of P1,000,000 was made based on the profit for the year ended December 31, 2022. On February 1, 2023, a customer went into liquidation having owed the entity P500,000 for the past 5 months. No allowance had been made against this account in the financial statements. On March 20, 2023, a manufacturing plant was destroyed by fire resulting in a financial loss of P2,500,000. What total amount should be recognized in profit or loss for 2022 to reflect adjusting events after the end of reporting period? P4,000,000 B P3,000,000 C) P2,500,000 P1,500,000

Gringo Company is completing the preparation of the financial statements for the year ended December 31, 2022. The financial statements are authorized for issue on March 31, 2023: On March 15, 2023, a dividend of P3,000,000 was declared and a contractual profit share payment of P1,000,000 was made based on the profit for the year ended December 31, 2022. On February 1, 2023, a customer went into liquidation having owed the entity P500,000 for the past 5 months. No allowance had been made against this account in the financial statements. On March 20, 2023, a manufacturing plant was destroyed by fire resulting in a financial loss of P2,500,000. What total amount should be recognized in profit or loss for 2022 to reflect adjusting events after the end of reporting period? P4,000,000 B P3,000,000 C) P2,500,000 P1,500,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 16E

See similar textbooks

Similar questions

PLEASE ANSWER ASAP Problem No. 1 AACA Corporation was incorporated on Dec. 1, 2021, and began operations one week later. Before closing the books for the fiscal year ended Nov. 30, 2022, the controller prepared the following financial statements: AACA Corporation Statement of Financial Position November 30, 2022 Assets Current assets Cash P150,000 Marketable securities, at cost 60,000 Accounts receivable 450,000 Allowance for doubtful accounts ( 59,000) Inventories 430,000 Prepaid insurance 15,000 Total current assets 1,046,000 Property, plant and equipment 426,000 Less accumulated depreciation ( 40,000) Property, plant and equipment, net 386,000 Research and development costs 120,000 Total assets P1,552,000 Liabilities and Shareholders' Equity Current liabilities Accounts payable and accrued expenses P 592,000…
Exercise 12: Marcus corp earned P645,000 during the year ended June 30, 2021. It paid dividends amounting to P310,000 and the balance went into retained earnings. Total earnings at the end of the year 2021 = P925,280 Find the company's retained earnings on its balance sheet on July 1,2020
Prince Corporations accounts provided the following information at December 31, 2019: What should be the current balance of retained earnings? a. 520,000 b. 580,000 c. 610,000 d. 670,000
Situation You are the assistant accountant for Tyler Corporation. It is mid-January 2020 and you are helping to prepare Tylers balance sheet for December 31, 2019. Tyler will publish this balance sheet on March 1, 2020, after the auditors have completed their work. Tyler has a 100,000 note payable that was issued in 2018 and that is due March 6, 2020. On January 5, 2020, Tyler sold 2,000 shares of its 10 par common stock for 80,000. Its intent is to use these proceeds (plus 20,000 cash it already has on hand) to repay the note payable on March 6. The head accountant says Im not sure how to classify the 100,000 note payable on the December 31, 2019, balance sheet. Check this out for me. Directions Research the related generally accepted accounting principles and prepare a short memo to the head accountant that explains how Tyler should report the 100,000 note payable on its December 31, 2019, balance sheet.
41 Problem No. 1 AACA Corporation was incorporated on Dec. 1, 2021, and began operations one week later. Before closing the books for the fiscal year ended Nov. 30, 2022, the controller prepared the following financial statements: AACA Corporation Statement of Financial Position November 30, 2022 Assets Current assets Cash P150,000 Marketable securities, at cost 60,000 Accounts receivable 450,000 Allowance for doubtful accounts ( 59,000) Inventories 430,000 Prepaid insurance 15,000 Total current assets 1,046,000 Property, plant and equipment 426,000 Less accumulated depreciation ( 40,000) Property, plant and equipment, net 386,000 Research and development costs 120,000 Total assets P1,552,000 Liabilities and Shareholders' Equity Current liabilities Accounts payable and accrued…
CCC Company reported the following liability balance on December 31, 2022: 12% note payable issued on March 1, 2021, maturing on March 1, 2023 5,000,00010% note payable issued on October 1, 2021, maturing October 1, 2023 3,000,000 The 2022 financial statements were issued on March 31, 2023. On January 31, 2023, the entire P5,000,000 balance of the 12% note payable was refinanced through issuance of a long-term obligation payable lump sum. Under the loan agreement for the 10% note payable, the entity has the discretion to refinance the obligation for at least twelve months after December 31, 2022. What amount of the note should be classified as current on December 31, 2022?
Problem 9-19 (IFRS) P600,000. As a result of a restructuring agreement on 1, 2021, the creditor agreed to the following concessions January a. Accrued interest of P600,000 is forgiven.. b. The new principal is P4,000,000. c. The new interest rate is 6% payable every December a. e. The entity paid P350,000 as an arrangement fee to creditor. The PV of 1 at 10% for 3 periods is 0.75 and the PV of ordinary annuity of 1 at 10% for 3 periods is 2.49. The market rate of interest for similar note is 14%. The Dy of 1 at 14% for 3 periods is 0.67 and the PV of an ordinary annuity of 1 at 14% for 3 periods is 2.32. 1. At what amount should the new note payable be initially measured? a. 3,597,600 b. 3,947,600 c. 3,236,800 d. 4,000,000 2. What amount of gain on extinguishment should be recognized for 2021? а. 3,363,200 b. 3,013,200 c. 2,652,400 d. 3,002,400 3. What amount should be reported as interest expense for the 2021? a. 453,152 b. 394,760 с. 359,760 d. 240,000 4. What is the carrying amount…
Problem 3:Intercom Company is planning to refinance certain short-term obligations on a long term basis. The entity has a December 31 year-end and the 201 9 financial statements will be published on March 15, 2020.0n December 31, 2019, before reclassification of short-term debt, the liabilities are:Current liabilities:Accounts Payable 7,000,000Note payable-bank 12,000,000Accrued expenses 4,000,000Noncurrent liabilities:Mortgage payable 4,000,000Note payable-due in 2021 3,000,000The entity intends to refinance ₱9,000,000 of the₱ 12,000,000 bank note payable on a long term basisAlthough the entire ₱12,000,000 is due on June 30, 2020, the bank has informally agreed to extend the maturity date for₱ 6,000,000 to June 30, 2021, if necessary.On January 31, 2020, the entity issued share capital for₱ 4,000,000, net issue costs and underwriting fees of ₱500,000.On February 15, 2020, the entity entered into a financing agreement with a financially capable commercial bank, permitting the entity to…
Comprehensive Problem 11-1 Floyd Corporation was formed and began operations on January 1, 2020. The corporation is located at 210 N. Main St., Pearisburg, VA 24134 and the EIN is 91-1111111. The corporation's income statement for the year and the balance sheet at year-end are presented below. The Floyd Corporation Income Statementfor the Year Ended December 31, 2020 Gross income from operations $320,000 Qualified dividends received from a 15percent-owned domestic corporation 20,000 Total gross income 340,000 Cost of goods sold (70,000) Total income 270,000 Other expenses: Compensation of officers $80,000 Salaries and wages 20,000 Bad debts (direct charge-offs) 9,000 Repairs 3,000 Depreciation for book (tax depreciation = $90,000) 10,000 Advertising 3,000 Payroll taxes 15,000 Total other expenses (140,000) Pretax book income 130,000 Income tax expense 25,200 Net income…
ASSIGNMENT 02: The account balances in the books of Academia Partnership at the end of its first year of operations on December 31, 2019 are as follows: 756,000 186,000 Accounts receivable Todoroki, drawing 600,000 144,000 Accounts payable Todoroki, capital Denki, capital Cash 489,000 Denki, drawing 54,000 582,750 Gen. expenses-others 756,000 Interest expense 26,250 Interest income 21,000 Notes payable 360,000 Notes receivable 120,000 Purchases 4,920,000 Purchase discount 138,000 Purch. returns & allow. 99,000 Sales 5,100,000 Sales salaries 480,000 Store furniture 222,000 Store supplies 36,000 Taxes and licenses 36,000 The data requiring adjustments as of December 31, 2019 and agreements relating to division of partnership profit or loss are as follows: 1. Inventories: merchandise, P1,406,000; supplies, P16,500 2. Depreciation of store furniture, 10% a year. Additions to store furniture were made on March 1 costing P54,000 3. Accrued advertising, P9,500 4. Prepaid taxes and licenses,…
QUESTION SIX The following financial statements relate to ZB Plc. ZB PLC Statement of comprehensive Income for the year ended 31st December: 2021 2020 K'000 K'000 Revenue 3,068,959 2,305,425 Cost of sales -2,024,857 -1,346,701 Gross profit 1,044,102 958,724 Other expenses -244,307 -458,473 Net impairment credit on financial assets 12,291 3,002 Distribution costs -208,749 -178,028 Administrative expenses -413,157 -302,323 Operating profit 190,180 22,902 Finance Income 2,978 1,557 Interest Expense -86,936 -15,974 Profit before income tax 106,222 8,485 Income tax credit (expense) 41,730 -2,546 Profit for the year 147,952 5,939 Other comprehensive income Total comprehensive income for the year 147,952 5,939 ZB PLC Statement of Financial Position as at 31st December:…
Problem 1-14 (AICPA Adapted) Dean Company has a P2,000,000 note payable due June 30. 2021. On December 31, 2020, the entity signed an agreement to borrow up to P2,000,000 to refinance the note payable on a long-term basis. The financing agreement called for borrowing not to exceed 80% of the value of the collateral the entity was providing. On December 31, 2020, the value of the collateral was P1,500,000. On December 31, 2020, what amount of the note payable should be reported as current liability? 2,000,000 1,500,000 800,000 500,000 a. b. с. 000 0600 d. Psoblem 1-15 (AICPA Adanted) Willem Company reported the following liabilities on December 31, 2020: Accounts payable Short-term borrowings Mortgage payable, current portion P100,000 Bank loan payable, due June 30, 2021 750,000 400,000 3,500,000 1,000,000 The P1,000,000 bank loan was refinanced with a 5-year loan on January 15, 2021, with the first principal payment due January 15, 2022. The financial statements were issued February…