24. When preparing a draft of its December 31, 2020 balance sheet. Era Joy reported net assets totaling P50,000,000. Included is the asset section of the balance sheet were: • Treasury stock of Era Joy Company at cost, which approximates market value on December 31, P5,000,000 • Property no longer adopted for use in business, P1,000,000 • Cash surrender value, P500,000 • Allowance for unrealized loss on noncurrent equity investments, P1,500,000 • Computer software, P4,000,000 At what amount, should the net assets be reported on December 31, 2020?
Q: 1. The following information is from Direct to You Corp.’s (DYC) financial records for its year…
A: Cash flow from investing activities includes sale/purchase of PPE, investments, intangible assets,…
Q: A Company recently petitioned for bankruptcy and is now in the process of preparing a statement of…
A: amount will be available for general unsecured creditors upon liquidation is
Q: The following information is provided from the financial statements of Circus Ltd: 2019 €000 2018…
A: Cash flow statement is a statement which is prepared to find out the cash comes in and goes out , by…
Q: On October 1, 2021, a company declared to its shareholders a property dividend in the form of pieces…
A: The amount will be reported in 2021 statement of profit or loss as a a result of property dividend…
Q: 15 DUFFLE Corp. had the following data ascertained before liquidation: Total book value of the…
A: In this problem assets are revalued from their book values for the purpose of…
Q: 3. On December 1, 2021, Violet Company committed to a plan to dispose of the assets of a business…
A: Pretax loss or profit:- It is the profit or loss which are measured by the companies before paying…
Q: Tsup-Tsup Corporation filed a bankruptcy petition on January 2009. On March 1, 2009, the trustee…
A: Calculation of Total free asset
Q: Presented below is information related to Donaldson Corp., (a publicly traded company) for the year…
A: The transactions of the company will be recorded first in the company's books which is called as…
Q: YOU CAN DO IT Corporation has equipment with a carrying value of 450,000 on December 31, 2021. The…
A: Solution: Impaired asset is an assets which is having market value less than the value listed on…
Q: The draft balance sheet of Four Corporation as of December 31, 2020 reported the net property, plant…
A: 1. Warehouse details Particulars Amount (P) Material 150000 Labour 800000…
Q: The following breakdown of the MNO Corporation's property, plant and equipment and bonds payable is…
A: Cash flow from investing activities: It is a section of the cash flow statement that shows the cash…
Q: On its December 31, 2020, balance sheet, Post Co. reported its investment in financial asset @ fair…
A: Following will be posted in the income statement at year end
Q: An entity had the following events and transactions during 2020: - Depreciation for 2019 was…
A: Answer: An entity had the following events and transactions during 2020:- Depreciation for 2019 was…
Q: During 2020, Hani Company incurred average accumulated expenditures of $1,000,000 during the…
A: Interest capitalized during 2020 = Face value of note x interest rate x No. of months /12
Q: During 2020, Hani Company incurred average accumulated expenditures of $1,000,000 during the…
A: Interest is the amount which is to be paid on the note payable or loan payable as a compensation for…
Q: Present in good accounting form
A: Partnership means where two or more person comes together to do some common business activity and…
Q: Company showed equipment with an original cost pf P379,000 and P344,000 with accumulated…
A: Depreciation is an expense which is charged on depreciable assets. Depreciation is the reduction in…
Q: All the issued and outstanding common stock of MOA Company were brought by Aura Company on October…
A: Calculation of fair value of net identifiable assets : Particulars Amount Cash P50,000…
Q: Show the solution in good accounting form Orange Company’s ledger revealed the following account…
A: Assets that are not physical in nature are known as intangible assets. Patents, goodwill, trademarks…
Q: In 2020, LRRR Corp., a calendar year corporation, acquired and placed in service the assets listed…
A: Given, Computer on 21.08.2020 cost = 1050000 recovery period = 5 years depreciation calculation of…
Q: ABC Corp. acquired 40% of DEF Corp. by spending Rp1.000.000 cash on January 1, 2020. Book value of…
A: ABC Corporation's Acquisition cost = Rp 1000000 Book value of assets of DEF on the date of…
Q: Sister Company provided the following information for 2020: Current asset, Jan 1-P240,000; Property,…
A: Working capital on Jan 1, 2020 = Current asset on Jan 1, 2020 - current liabilities on Jan 1, 2020…
Q: In 2020, LRRR Corp., a calendar year corporation, acquired and placed in service the assets listed…
A: “Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: The following information is available about Company DEF's depreciable assets on January 1, 2019…
A: >Depreciation is the amount that gets expensed over the life of the asset. >This amount is…
Q: MBA Corporation reported net income of P7,410,000 for 2020, which included the following items:…
A: Particulars Amount (P) Net Income 7410000 Add: Unrealised Loss on Financial Asset 540000…
Q: osition of the assets would be P700,000 and the component’s operating income was P200,000. What…
A: Pretax losses refer to the sum value of money gained or losses made by a company before paying taxes…
Q: When AAA Company filed for liquidation with the Securities and Exchange Commission, it prepared the…
A: Introduction: A person or organization that loaned money without needing specific assets as…
Q: When AAA Company filed for liquidation with the Securities and Exchange Commission, it prepared the…
A: Formula: percentage of their claims are the unsecured creditors = Total value of Free Assets /…
Q: The management of Sprague Inc. was discussing whether certain equipment should be written off as a…
A: Impairment of assets: When the
Q: On April 30, 2020, Sa Young Nam Company approved a plan to dispose of a segment of its business. At…
A: Answer: The amount that is reported to profit and loss account for 2020 is the portion of profit and…
Q: Company recently petitioned for bankruptcy and is now in the process of preparing a statement of…
A: When a company has to undergo a liquidation process, the liabilities that it has due has to be paid…
Q: The draft balance sheet of Four Corporation as of December 31, 2020 reported the net property, plant…
A:
Q: On July 1, 2020, Matcha, Inc. acquired as a long-term investment for P1,600,000, a 40% interest in…
A: An associate entity is an entity in which the investor company has a significant influence on the…
Q: Distressed Corporation is undergoing liquidation. Relevant information as of January 1, 20x1 is…
A: At the time of liquidation of partnership the assets are sold and the liabilities are paid off.
Q: Following are the balances of accounts of a wasting asset entity: How much is the maximum…
A: Dividend is the share of the profits of the company.…
Q: When AAA Company filed for liquidation with the Securities and Exchange Commission, it prepared the…
A: Liquidation means where the company decide to close out the operations , sell all the assets and…
Q: Assuming P omitted certain transactions as illustrated below. You must discuss about the accounting…
A: Given Data: Applicable Accounting Standard - IFRS 10- Consolidated Financial Statements. P acquired…
Q: 11. On May 31,2020, Genesis Company has assets and liabilities with the following fair values:…
A: Since you have asked multiple questions, we will solve the first question for you . If you want any…
Q: The following information is provided from the financial statements of Circus Ltd: 2019 €000 2018…
A: Cash from Investing activities is an important section of cash flow statement. It shows cash inflows…
Q: t year-end 2021, Wallace Landscaping's total assets, all of which are used in operations, were $2.34…
A: Company need to raise money for long term growth in sales but some can be arranged internally but…
Q: The unsecured creditors of Club Filipino Corporation filed a petition on July 1, 2021 to force the…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: In 2020, LRRR Corp., a calendar year corporation, acquired and placed in service the assets listed…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: MBA Corporation reported net income of P7,410,000 for 2020, which included the following items:…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: On Jan. 1, 2020, ABC purchased 30% of the outstanding shares of an investee for P7,500,000. As of…
A: Accounting: Accounting is a system, or a process of collecting and organizing economic transactions,…
Q: "YESORYES Corp.'s comparative balance sheet at December 31, 2020 and 2019 reported accumulated…
A: 1. Depreciation Expenses - Depreciation Expenses are the expense incurred on the wear and tear of…
Q: Distressed Corporation is undergoing liquidation. Relevant information as of January 1, 20x1 is…
A: Net Free Assets-:Net assets are interpreted as the entire assets of a company, deducted its entire…
Q: Jay Company plans to dispose of a group of net assets that form part of a disposal group. The net…
A: As per provisons of PFRS on the assets held for sale. A asset or a disposal group can be classified…
Q: for the year ended 31 December 2020 2020 RM'000 Profit 495 Share of profits of associate company…
A: Statement of cash flows: Statement of cash flow is a financial statement that shows the cash and…
Q: 1. Kent Co. filed a voluntary bankruptcy petition on August 15, 2020, and the statement o affairs…
A: 1. When a company liquidates, there are various creditors a company has to pay. Types of creditors…
Q: Interest on Notes Payable 2,400 Bonds Payable (secured by land and building)…
A: SOLUTION UNSECURED CREDITORS IS AN INDIVIDUAL OR INSTITUTION THAT LENDS MONEY WITHOUT WITHOUT…
24. When preparing a draft of its December 31, 2020 balance sheet. Era Joy reported net assets totaling P50,000,000. Included is the asset section of the balance sheet were:
•
• Property no longer adopted for use in business, P1,000,000
• Cash surrender value, P500,000
• Allowance for unrealized loss on noncurrent equity investments, P1,500,000
• Computer software, P4,000,000
At what amount, should the net assets be reported on December 31, 2020?
Step by step
Solved in 2 steps
- Gray Companys financial statements showed income before income taxes of 4,030,000 for the year ended December 31, 2020, and 3,330,000 for the year ended December 31, 2019. Additional information is as follows: Capital expenditures were 2,800,000 in 2020 and 4,000,000 in 2019. Included in the 2020 capital expenditures is equipment purchased for 1,000,000 on January 1, 2020, with no salvage value. Gray used straight-line depreciation based on a 10-year estimated life in its financial statements. As a result of additional information now available, it is estimated that this equipment should have only an 8-year life. Gray made an error in its financial statements that should be regarded as material. A payment of 180,000 was made in January 2020 and charged to expense in 2020 for insurance premiums applicable to policies commencing and expiring in 2019. No liability had been recorded for this item at December 31, 2019. The allowance for doubtful accounts reflected in Grays financial statements was 7,000 at December 31, 2020, and 97,000 at December 31, 2019. During 2020, 90,000 of uncollectible receivables were written off against the allowance for doubtful accounts. In 2019, the provision for doubtful accounts was based on a percentage of net sales. The 2020 provision has not yet been recorded. Net sales were 58,500,000 for the year ended December 31, 2020, and 49,230,000 for the year ended December 31, 2019. Based on the latest available facts, the 2020 provision for doubtful accounts is estimated to be 0.2% of net sales. A review of the estimated warranty liability at December 31, 2020, which is included in other liabilities in Grays financial statements, has disclosed that this estimated liability should be increased 170,000. Gray has two large blast furnaces that it uses in its manufacturing process. These furnaces must be periodically relined. Furnace A was relined in January 2014 at a cost of 230,000 and in January 2019 at a cost of 280,000. Furnace B was relined for the first time in January 2020 at a cost of 300,000. In Grays financial statements, these costs were expensed as incurred. Since a relining will last for 5 years, Grays management feels it would be preferable to capitalize and depreciate the cost of the relining over the productive life of the relining. Gray has decided to nuke a change in accounting principle from expensing relining costs as incurred to capitalizing them and depreciating them over their productive life on a straight-line basis with a full years depreciation in the year of relining. This change meets the requirements for a change in accounting principle under GAAP. Required: 1. For the years ended December 31, 2020 and 2019, prepare a worksheet reconciling income before income taxes as given previously with income before income taxes as adjusted for the preceding additional information. Show supporting computations in good form. Ignore income taxes and deferred tax considerations in your answer. The worksheet should have the following format: 2. As of January 1, 2020, compute the retrospective adjustment of retained earnings for the change in accounting principle from expensing to capitalizing relining costs. Ignore income taxes and deferred tax considerations in your answer.LO.4, 7 In December 2019, Carl Corporation sold land it held as an investment. The corporation received 50,000 in 2019 and a note payable (with adequate interest) for 150,000 to be paid in 2021. Carl Corporations cost of the land was 80,000. The corporation has a 90,000 net capital loss carryover that will expire in 2019. Should Carl Corporation report the sale in 2019 or use the installment method to report the income as payments are received?Hamilton Companys balance sheet on January 1, 2019, was as follows: Korbel Company is considering purchasing Hamilton (a privately held company) and discovers the following about Hamilton: a. No allowance for doubtful accounts has been established. A 10,000 allowance is considered appropriate. b. Marketable securities are valued at cost. The current market value is 60,000. c. The LIFO inventory method is used. The FIFO inventory of 140,000 would be used if the company is acquired. d. Land, included in property, plant, and equipment, which is recorded at its cost of 50,000, is worth 120,000. The remaining property, plant, and equipment is worth 10% more than its depreciated cost. e. The company has an unrecorded trademark that is worth 70,000. f. The companys bonds are currently trading for 130,000. g. The pension liability is understated by 40,000. Required: 1. Compute the amount of goodwill if Korbel agrees to pay 500,000 cash for Hamilton. 2. Next Level What are the reasons that the book value of Hamiltons net identifiable assets differ from their market value? 3. Prepare the journal entry to record the acquisition on the books of Korbel assuming Hamilton is liquidated. 4. If Korbel agrees to pay only 400,000 cash, how much goodwill exists? 5. If Korbel pays only 400,000 cash, prepare the journal entry to record the acquisition on its books, assuming Hamilton is liquidated.
- 16 All the issued and outstanding common stock of MOA Company were brought by Aura Company on October 1, 2020 for P700,000. The assets and liabilities of Aura Company were: Cash 50,000 Accounts receivable (net of P25,000 allowance for bad debts) 250,000 Inventory 150,000 Property & Equipment (net of P100,000, allowance for depreciation) 300,000 Accounts payable 130,000 On October 1, 2020 the fair value of the following assets was as follows: Accounts receivable (net) 235,000 Inventory 130,000 Property & equipment (net) 400,000 There is an unrecorded warranty liability on prior-product sales estimated P20,000 discounted cash flow based on estimated future cash flows. The amount of goodwill as a result of the business combination should be: Group of answer choices 65,000 100,000 35,000 ZeroAll the issued and outstanding common stock of MOA Company were brought by Aura Company on October 1, 2020 for P700,000. The assets and liabilities of Aura Company were: Cash 50,000 Accounts receivable (net of P25,000 allowance for bad debts) 250,000 Inventory 150,000 Property & Equipment (net of P100,000, allowance for depreciation) 300,000 Accounts payable 130,000 On October 1, 2020 the fair value of the following assets was as follows: Accounts receivable (net) 235,000 Inventory 130,000 Property & equipment (net) 400,000 There is an unrecorded warranty liability on prior-product sales estimated P20,000 discounted cash flow based on estimated future cash flows. The amount of goodwill as a result of the business combination should be: a) 35,000 b) Zero c) 100,000 d) 65,000All the issued and outstanding common stock of MOA Company were brought by Aura Company on October 1, 2020 for P700,000. The assets and liabilities of Aura Company were: Cash 50,000 Accounts receivable (net of P25,000 allowance for bad debts) 250,000 Inventory 150,000 Property & Equipment (net of P100,000, allowance for depreciation) 300,000 Accounts payable 130,000 On October 1, 2020 the fair value of the following assets was as follows: Accounts receivable (net) 235,000 Inventory 130,000 Property & equipment (net) 400,000 There is an unrecorded warranty liability on prior-product sales estimated P20,000 discounted cash flow based on estimated future cash flows. The amount of goodwill as a result of the business combination should be:
- 5. PSA Inc. prepared a draft of its 2021 Statement of Financial Position. The draft statement reported total assets of P4.375,000. The total assets included the following items. Treasury shares of PSA Inc. at cost, which approximates market value on December 31 P120,000 Unamortized patent 56,000 Cash surrender value of life insurance 68,500 Cumulative translation loss 42,000 At what amount should total assets be correctly reported in the December 31,2010 Statement of Financial Position?17. At December 31, 2019, Afro Corp. reported P1,750,000 of appropriated retained earnings for the construction of a new office building, which was completed in 2020 at a total cost of P1,500,000. In 2020, Afro appropriated P1,200,000 of retained earnings for the construction of a new plant. Also, P2,000,000 of cash was restricted for the retirement of bonds due in 2022. In its 2020 balance sheet, Afro should report what amount of appropriated retained earnings? Group of answer choices P3,200,000 P1,200,000 P2,950,000 P1,450,000When preparing a draft of its 2020 statement of financial position, A Inc. reported net assets totaling P875,000. Included in the asset section of the statement of financial position were the following: Treasury shares of Mount, Inc. at cost, which approximates market value P24,000 Idle machinery 11,200 Cash surrender value of life insurance policy on corporate executives 13,700 Allowance for decline in market value of available-for-sale securities 8,400 At what amount should A’s net assets be reported in the December 31, 2020 statement of financial position?
- 1. The following information is from Direct to You Corp.’s (DYC) financial records for its year ended December 31, 2020: Select statement of financial position information: 2020 2019 Investments in financial assets (at fair value through profit or loss [FVPL]) 12,000 10,000 Inventory 575,000 498,000 Property, plant, and equipment (PPE) 1,984,000 1,396,000 Less: accumulated depreciation (650,400) (487,000) Copyright 126,000 135,000 Patents 564,000 417,000 Select statement of comprehensive income information: Depreciation of property, plant, and equipment (334,400) Amortization of patents (65,000) Interest expense (75,000) Impairment loss — copyright (9,000) Gain on sale of PPE 23,000 Additional information: PPE that originally cost $570,000 was sold during the year. 100,000 common shares were issued in 2020 to acquire $450,000 of property, plant, and equipment. DYC is subject to IFRS. What amount of net cash used…4. On December 31, 2019, the statement of financial position of Twitter Corporation showed the following property and equipment after charging depreciation: Building P3,000,000 Accumulated depreciation (1,000,000) P2,000,000 Equipment 1,200,000 Accumulated depreciation (400,000) 800,000 The company has adopted the revaluation model for the valuation of property and equipment. This has resulted in the recognition in prior periods of an asset revaluation surplus for the building of P140,000. The company does not make a transfer to retained earnings in respect of realized revaluation surplus. On December 31, 2019, an independent valuer assessed the fair value of the building to be P1,600,000 and the equipment to be P900,000. The building and equipment had remaining useful lives of 25 years and 4 years, respectively, as of that date. The amount to be recognized in profit or loss for 2019 related to the revaluation of property and…YSA Inc. provided the following information on December 31, 2021: Cash 5,000,000 Financial assets at fair value through profit or loss, including cost of P500,000 of YSA Inc. 2,500,000 Accounts receivable 3,000,000 Inventory 1,000,000 Land 30,000,000 Equipment 10,000,000 Accumulated depreciation - equipment 6,000,000 Building 40,000,000 Accumulated depreciation - building 14,000,000 Furniture and Fixtures 15,000,000 Accumulated depreciation - Furniture and Fixtures 3,900,000 Accounts payable, after deducting debit balances in supplier's accounts amounting to P200,000 4,500,000 Accrued expenses payable 500,000 Bonds payable, due December 31, 2022 3,500,000 Discount on bonds payable 500,000 Deferred tax liability 300,000 Dividends payable 400,000 Credit balances of customers' accounts 50,000 Share dividend payable 200,000 15% note payable issued on July 1, 2020, maturing on July 1, 2022 6,000,000 20% note payable issued on August 31, 2020, maturing on August 31, 2021 3,000,000…