Solve and explain the reason why it is the answer. 5. Poof Co. has total current liabilities of P3,120,000 on Dec. 3120x1 before possible adjustment for the following:Poof Co.'s authorized capitalization was fully issued. Duringthe year, Poof Co. filed an amended Articles of Incorporationwith the Securities and Exchange Commission (SEC)increasing its authorized capitalization. Although the SEC'sapproval was not yet received, Poof Co. started receivingdeposits for future subscription of its shares. A total ofP480,000 were collected and credited to "Subscribed Capital."Per agreement with the subscribers, the deposits are to bereimbursed immediately if in case the SEC rejects Poof Co.'sapplication for increased capitalization. Poof Co. expects toreceive the SEC's decision in April 20x2.Included in the total current liabilities is a bank loan ofP600,000 that is maturing on July 1, 20x2. On February 14,20x2, Poof Co. entered into a refinancing agreement with thebank to extend the repayment of the loan to July 1, 20x5. Theoriginal loan agreement provides for such renewal option, andas of Dec. 31, 20x1, Poof Co. has complied with all theconditions relating to the extension of the loan repayment.Poof Co.'s financial statements were authorized for issue onMarch 15, 20x2.How much is the adjusted total current liabilities on Dec, 31, 20x1?a. 2,520,000b. 3,000,000c. 3,120,000d. 3,600,000

Current liabilities are the obligations repayable within a year. It is a part of liabilities' side…

Answered: - adjusted total current liabilities

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter3: Corporations: Introduction And Operating Rules

Section: Chapter Questions

Problem 59P

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On January 1, 2020, Aguilar Corporation purchased bonds with a face value of P4,000,000 forP3,649,600 in order to collect contractual cash flows that are solely payments of principal and interest.The bonds are purchased to yield 10% interest. The nominal interest rate on the bonds is 8% payableannually every December 31.On December 31, 2021, as a result of a change in the business model for managing financial assets,the entity decided to reclassify the bonds from amortized cost to fair value. On that date, the carryingamount of the bond investment is P3,744,016 after discount amortization using the effective interestmethod. The market value of the bonds on January 1, 2015, is 10%. Requirements: 1. Preparethe necessary journal entries to record the transactions using the change is from fair value to amortized cost.
On January 1, 2020, Aguilar Corporation purchased bonds with a face value of P4,000,000 forP3,649,600 in order to collect contractual cash flows that are solely payments of principal and interest.The bonds are purchased to yield 10% interest. The nominal interest rate on the bonds is 8% payableannually every December 31.On December 31, 2021, as a result of a change in the business model for managing financial assets,the entity decided to reclassify the bonds from amortized cost to fair value. On that date, the carryingamount of the bond investment is P3,744,016 after discount amortization using the effective interestmethod. The market value of the bonds on January 1, 2015, is 10%. Requirements: 1. What if, initially, the investment is classified at FVTPL, then subsequently changed it to FVTOCI, prepare the necessary journal entries to record the transactions. Assume that the bond is for 5 years on the date of acquisition.
Boulter, Incorporated, began business on January 1, 2024. At the end of December 2024, Boulter had the following investments in debt securities: Trading Available-for-Sale Cost $ 60,000 $ 110,000 Fair value 54,000 107,500 All declines in value are deemed to be temporary in nature. How should the corresponding losses be reflected in the financial statements at December 31, 2024? Income Statement Accumulated Other Comprehensive Income in Shareholders' Equity a. $ 8,500 $ 0 b. $ 0 $ 8,500 c. $ 6,000 $ 2,500 d. $ 2,500 $ 6,000
On January 1, 2020, Aguilar Corporation purchased bonds with a face value of P4,000,000 for P3,649,600 in order to collect contractual cash flows that are solely payments of principal and interest. The bonds are purchased to yield 10% interest. The nominal interest rate on the bonds is 8% payable annually every December 31. On December 31, 2021, as a result of a change in the business model for managing financial assets, the entity decided to reclassify the bonds from amortized cost to fair value. On that date, the carrying amount of the bond investment is P3,744,016 after discount amortization using the effective interest method. The market value of the bonds on January 1, 2015, is 10%. Requirements: Prepare the necessary journal entries to record the Using the same information, except that the change is from fair value to amortized cost, prepare the necessary journal entries to record the What if, initially, the investment is classified at FVTPL, then subsequently changed it to…
2. On January 1, 20x1, an entity purchased marketable equity securities for P2,500,000. The entity paid commission and taxes of P190,000. The equity securities do not qualify as financial asset held for trading. The entity made irrevocable election to present unrealized gain and loss in other comprehensive income. The securities have a market value of P2,600,000, and P2,750,000 on December 31, 20x1 and December 31, 20x2. O n July 1, 2022, half of the securities are sold for P1,400,000. On December 31, 20x2, how much shall be shown in the statement of comprehensive income as unrealized gain/ loss? (sample answer: 10,500 UG or 10,500 UL)
Wickum Corporation reports under IFRS, and recognized a $500,000 impairment of an HTM debt investment in Right Corporation. Subsequently, the credit loss for Wickum’s investment decreased by $300,000. How would Wickum account for that change?
(Based on Appendix 14B) Pratt Industries owes First National Bank $5 million but, due to financial difficulties,is unable to comply with the original terms of the loan. The bank agrees to settle the debt in exchange for landhaving a fair value of $3 million. The book value of the property on Pratt’s books is $2 million. For the reportingperiod in which the debt is settled, what amount(s) will Pratt report on its income statement in connection withthe troubled debt restructuring?
On January 1, 2020, the Stew Corporation purchased equity securities to be held for trading purposes for $2,000,000. The company also paid commissions, taxes and other transaction costs amounting to $50,000. The securities had fair values at December 31, 2020 and 2021, respectively: $1,750,000 and $2,100,000. No securities were sold during 2020. What amount of unrealized gain (loss) should be reported in the 2020 profit or loss section of the statement of comprehensive income?
On October 2020, X Corporation purchased a financial instrument that qualifies as a derivative and serves as a hedge for market value risk. At the end of the year the instrument increased in value by 4,000 . How should corporation X present that profit in the financial statements? Half as part of net income and the other half as comprehensive income you shouldn't recognize it within net income as other comprehensive income
The following information is available for Barkley Company at December 31, 2020, regarding its investments. Securities Cost Fair Value 3,000 shares of Myers Corporation common stock $40,000 $48,000 1,000 shares of Cole Incorporated preferred stock 25,000 22,000 $65,000 $70,000 Instructions a. Prepare the adjusting entry (if any) for 2020, assuming no balance in the Fair Value Adjustment account at January 1, 2020. Neither of Barkley's investments result in significant influence. b. Discuss how the amounts reported in the financial statements are affected by the entries in (a).
4.Assume the following independent cases: (a) At the beginning of the year, a check was issued for P400,000 as payment for a piece of land and the buyer assumed the liability for unpaid taxes in arrears for the previous year, P10,000 and those assessed for the current year, P9,000.(b) A company issued 14,000 ordinary shares (P50 par) with a market value of P60 per share (based upon a recent sale of 100 shares) for the land. The land was recently appraised at P800,000 by independent and professional appraisers.(c) A company rejected an offer to purchase the land for P8,000,000 cash two years ago. Instead, the company issued 100,000 ordinary shares for the land (market value of the ordinary share, P78 each based on several recent large transactions and normal weekly stock trading volume).How much is the cost of land acquired in (a), (b), and (c), respectively? a. 419,000; 800,000; 7,800,000 b. 410,000; 800,000; 7,800,000 c. 410,000; 840,000; 7,800,000 d. 419,000; 840,000;…
The following information is available for Sheridan Company at December 31, 2020, regarding its investments. Securities Cost Fair Value 2,600 shares of Myers Corporation Common Stock $ 36,900 $ 46,200 1,200 shares of Cole Incorporated Preferred Stock 23,600 21,100 $ 60,500 $ 67,300 (a) Prepare the adjusting entry (if any) for 2020, assuming no balance in the Fair Value Adjustment account at January 1, 2020. Neither of Sheridan’s investments result in significant influence. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit

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