An entity reports profit of P1,000,000 for the year ended December 31, 20x1. The entity's financial statements are authorized for issue on April 3, 20x2. The following events take place after December 31, 20x1: a. On February 1, 20x2, a debtor files for bankruptcy. The entity has an outstanding loan receivable of P100,000 from the debtor. b. On March 1, 20x2, a flood damaged the entity's facilities. The entity estimates the cost of damages to be P450,000. c. On March 28, 20x2, the entity sells inventory for P100,000. The inventory has a cost of P140,000 and net realizable value of P120,000 on December 31, 20x1. The entity recognized an inventory write-down of P20,000 on December 31, 20x1. d. On April 1, 20x2, the entity reissues treasury shares originally acquired at a total cost of P200,000 for P260,000. Requirement: Compute for the adjusted profit.
An entity reports profit of P1,000,000 for the year ended December 31, 20x1. The entity's financial statements are authorized for issue on April 3, 20x2. The following events take place after December 31, 20x1:
a. On February 1, 20x2, a debtor files for bankruptcy. The entity has an outstanding loan receivable of P100,000 from the debtor.
b. On March 1, 20x2, a flood damaged the entity's facilities. The entity estimates the cost of damages to be P450,000.
c. On March 28, 20x2, the entity sells inventory for P100,000. The inventory has a cost of P140,000 and net realizable value of P120,000 on December 31, 20x1. The entity recognized an inventory write-down of P20,000 on December 31, 20x1.
d. On April 1, 20x2, the entity reissues treasury shares originally acquired at a total cost of P200,000 for P260,000.
Requirement: Compute for the adjusted profit.
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