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December Norway Company reported that the year-end is ! receivable of P400,000 from a customer that is due 60 2021, a receiver was appointed for the said customer. authorized for 31, 2020 and the financial statements are issue on March 15, 2021. 1. On December 31, 2020, Norway Company haa 15, days after the end of reporting period. On January The receiver informed Norway that the P400,000 be paid in full by June 30, 2021. would 2. Norway Company measured share investments held trading at fair value through profit or loss. On Decembe 31, 2020, these investments were recorded at the marka value of P5,000,000. During the period up to February 15 2021, there was a steady decline in the market value of all the shares in the portfolio, and on February 15, 2021. the market value had fallen to P2,000,000. 3. Norway Company had reported a contingent liability on December 31, 2020 related to a court case in which Norway Company was the defendant. The case was not heard until the first week of February 2021. On March 1, 2021, the judge handed down a decision against Norway Company. The judge determined that Norway Company was liable to pay damages and costs totaling P3,000,000. 4. On December 31, 2020, Norway Company had an account receivable from a large customer in the amount of P3,500,000. On January 31, 2021, Norway Company was advised by the liquidator of the said customer that the customer was insolvent and would be unable to repay the full amount owed to Norway Company. The liquidator advised Norway Company in writing that only 10% of the account receivable will be paid on Ãpril 30, 2021. Required: Prepare adjusting entries on December 31, 2020 to reflect the events after reporting period.

December Norway Company reported that the year-end is ! receivable of P400,000 from a customer that is due 60 2021, a receiver was appointed for the said customer. authorized for 31, 2020 and the financial statements are issue on March 15, 2021. 1. On December 31, 2020, Norway Company haa 15, days after the end of reporting period. On January The receiver informed Norway that the P400,000 be paid in full by June 30, 2021. would 2. Norway Company measured share investments held trading at fair value through profit or loss. On Decembe 31, 2020, these investments were recorded at the marka value of P5,000,000. During the period up to February 15 2021, there was a steady decline in the market value of all the shares in the portfolio, and on February 15, 2021. the market value had fallen to P2,000,000. 3. Norway Company had reported a contingent liability on December 31, 2020 related to a court case in which Norway Company was the defendant. The case was not heard until the first week of February 2021. On March 1, 2021, the judge handed down a decision against Norway Company. The judge determined that Norway Company was liable to pay damages and costs totaling P3,000,000. 4. On December 31, 2020, Norway Company had an account receivable from a large customer in the amount of P3,500,000. On January 31, 2021, Norway Company was advised by the liquidator of the said customer that the customer was insolvent and would be unable to repay the full amount owed to Norway Company. The liquidator advised Norway Company in writing that only 10% of the account receivable will be paid on Ãpril 30, 2021. Required: Prepare adjusting entries on December 31, 2020 to reflect the events after reporting period.

Intermediate Accounting: Reporting And Analysis
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
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
Problem 6P
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1. On December 31, 2020, Norway Company had: 2021, a receiver was appointed for the said customer. Norway Company reported that the year-end is December The receiver informed Norway that the P400,000 would days after the end of reporting period. On January 15, authorized receivable of P400,000 from a customer that is due 60 31, 2020, these investments were recorded at the market 31, 2020 and the financial statements are issue on March 15, 2021. for be paid in full by June 30, 2021. 2. Norway Company measured share investments held . trading at fair value through profit or loss. On December value of P5,000,000. During the period up to February 15 2021, there was a steady decline in the market value of all the shares in the portfolio, and on February 15, 2021. the market value had fallen to P2,000,000. 3. Norway Company had reported a contingent liability on December 31, 2020 related to a court case in which Norway Company was the defendant. The case was not heard until the first week of February 2021. On March 1, 2021, the judge handed down a decision against Norway Company. The judge determined that Norway Company was liable to pay damages and costs totaling P3,000,000. 4. On December 31, 2020, Norway Company had an account receivable from a large customer in the amount of P3,500,000. On January 31, 2021, Norway Company was advised by the liquidator of the said customer that the customer was insolvent and would be unable to the repay full amount owed to Norway Company. The liquidator advised Norway Company in writing that only 10% of the account receivable will be paid on April 30, 2021. Required: Prepare adjusting entries on December 31, 2020 to reflec the events after reporting period.
Transcribed Image Text:1. On December 31, 2020, Norway Company had: 2021, a receiver was appointed for the said customer. Norway Company reported that the year-end is December The receiver informed Norway that the P400,000 would days after the end of reporting period. On January 15, authorized receivable of P400,000 from a customer that is due 60 31, 2020, these investments were recorded at the market 31, 2020 and the financial statements are issue on March 15, 2021. for be paid in full by June 30, 2021. 2. Norway Company measured share investments held . trading at fair value through profit or loss. On December value of P5,000,000. During the period up to February 15 2021, there was a steady decline in the market value of all the shares in the portfolio, and on February 15, 2021. the market value had fallen to P2,000,000. 3. Norway Company had reported a contingent liability on December 31, 2020 related to a court case in which Norway Company was the defendant. The case was not heard until the first week of February 2021. On March 1, 2021, the judge handed down a decision against Norway Company. The judge determined that Norway Company was liable to pay damages and costs totaling P3,000,000. 4. On December 31, 2020, Norway Company had an account receivable from a large customer in the amount of P3,500,000. On January 31, 2021, Norway Company was advised by the liquidator of the said customer that the customer was insolvent and would be unable to the repay full amount owed to Norway Company. The liquidator advised Norway Company in writing that only 10% of the account receivable will be paid on April 30, 2021. Required: Prepare adjusting entries on December 31, 2020 to reflec the events after reporting period.
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