1. What amount should be recorded as accrued liability on December 31, 2021 inrelation to this event? *1. Honest Corporation carried a provision of P1,500,000 in the draft financial statementsfor the year ended December 31, 2021 in relation to a labor case.The case was settled for P2,500,000 on February 28, 2022, a week before the financialstatements for the year ended December 31, 2021 were authorized for issue. Whatamount should be recorded as accrued liability on December 31, 2021 in relation to thisevent?A. 1,500,000B. 2,500,000C. 1,000,000D. 0O E. None of them

Answer: C.1,000,000 Accrued liabilities are such liabilities which have not yet been paid during an…

Answered: e yea ase wa ments

Business

Accounting

e yea ase wa ments

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

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 4MC: Prior to and during 2019, Shadrach Company reported tax depreciation at an amount higher than the...

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Koolman Construction Company began work on a contract in 2019. The contract price is 3,000,000, and the company determined that its performance obligation was satisfied over time. Other information relating to the contract is as follows: Required: 1. Compute the gross profit or loss recognized in 2019 and 2020. 2. Prepare the appropriate sections of the income statement and ending balance sheet for each year.
How do the all events and economic performance requirements apply to the following transactions by an accrual basis taxpayer? a. The company guarantees its products for six months. At the end of 2019, customers had made valid claims for 600,000 that were not paid until 2020. Also, the company estimates that another 400,000 in claims from 2019 sales will be filed and paid in 2020. b. The accrual basis taxpayer reported 200,000 in corporate taxable income for 2019. The state income tax rate was 6%. The corporation paid 7,000 in estimated state income taxes in 2019 and paid 2,000 on 2018 state income taxes when it filed its 2018 state income tax return in March 2019. The company filed its 2019 state income tax return in March 2020 and paid the remaining 5,000 of its 2019 state income tax liability. c. An employee was involved in an accident while making a sales call. The company paid the injured victim 15,000 in 2019 and agreed to pay the victim 15,000 a year for the next nine years.
Prior to and during 2019, Shadrach Company reported tax depreciation at an amount higher than the amount of financial depreciation, resulting in a book value of the depreciable assets of 24,500 for financial reporting purposes and of 20,000 for tax purposes at the end of 2019. In addition, Shadrach recognized a 3,500 estimated liability for legal expenses in the financial statements during 2019; it expects to pay this liability (and deduct it for tax purposes) in 2023. The current tax rate is 30%, no change in the tax rate has been enacted, and the company expects to be profitable in future years. What is the amount of the net deferred tax liability at the end of 2019? a. 300 b. 450 c. 1,050 d. 1,350
Honest Corporation carried a provision of P1,500,000 in the draft financial statements for the year ended December 31, 2021 in relation to a labor case. The case was settled for P2,500,000 on February 28, 2022, a week before the financial statements for the year ended December 31, 2021 were authorized for issue . What amount should be recorded as accrued liability on December 31, 2021 in relation to this event?
Honest Corporation carried a provision of P1,500,000 in the draft financial statements for the year ended December 31, 2021 in relation to a labor case. The case was settled for P2,500,000 on February 28, 2022, a week before the financial statements for the year ended December 31, 2021 were authorized for issue. What amount should be recorded as accrued liability on December 31, 2021 in relation to this event? A. 1,500,000 B. 2,500,000 C. 1,000,000 D. 0 E. None of them
1. REALME INC. entered into a lawsuit on December 20, 2021 and recognized on the same date a provision of ₱2,000,000. On February 28, 2022, when the financial statements for the year ended December 31, 2021 had not yet been authorized for issue, the case was settled and the court decided the final total damages to be paid by the entity at ₱3,000,000. In addition, the Company has a loan payable of ₱2,000,000 due on June 30, 2022. On January 1, 2022, before the authorization of the issuance of financial statements, the bank agreed to refinance the loan, extending the maturity to June 30, 2024. Also, another loan amounting to ₱7,000,000 due on December 1, 2022 was obtained by the Company on January 2, 2022 from BPI. REALME INC. has the discretion to refinance or roll over the loan for at least twelve months from December 31, 2022 REQUIRED: WHAT IS THE AMOUNT OF CURRENT LIABILITIES? A. ₱ 4,000,000 B. ₱ 10,000,000 C. ₱ 12,000,000 D. ₱ 5,000,000 WHAT IS THE AMOUNT OF THE NON-CURRENT…
An entity had the following liabilities on December 31, 2020: Accounts Payable 55,000 Unsecured notes, 8% due 7/1/2021 400,000 Accrued expenses 35,000 Contingent liability 450,000 Deferred tax liability 25,000 Senior bonds, 7%, due 3/31/2021 1,000,000 The contingent liability is an accrual for possible loss on a P1,000,000 lawsuit filed against the entity. The legal counsel expects the suit to be settled in 2021 and has estimated that the entity will be liable for damages in the range of P450,000 to P750,000. The deferred tax liability is expected to reverse in 2021. What amount should be reported on December 31, 2020 for current liabilities? None of theseNone of these 940,000940,000 1,490,0001,490,000 1,515,0001,515,000…
Northwest Company determined that it has an obligation relating to employees' rights to receive compensation for future absences attributable to employees’ services already rendered. The obligation relates to rights that vest, and payment of the compensation is probable. The amounts of Northwest's obligations as of December 31 are reasonably estimated as follows: Vacation pay P110,000 Sick pay 80,000 In its December 31 financial position, what amount should Northwest report as its liability for compensated absences?
Rodriguez Corporation includes the following items in its liabilities at December 31, 2020. 1. Notes payable, $25,000,000, due June 30, 2021. 2. Deposits from customers on equipment ordered by them from Rodriguez, $6,250,000. 3. Salaries and wages payable, $3,750,000, due January 14, 2021. Instructions Indicate in what circumstances, if any, each of the three liabilities above would be excluded from current liabilities.
If the employee benefits remain unpaid, how much liability shall Entity A accrue at the end of the year? A. 400,000 B. 200,000 C. 0 D. 300,000
As of December 31 of the current year, Fernandez Company has prepared the following informa-tion regarding its liabilities and other obligations: Notes payable, of which $20,000 will be repaid within thenext 12 months. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $150,000Interest expense that will result from existing liabilities overthe next 12 months. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175,000Lawsuit pending against the company, in which $500,000is claimed in damages. Legal counsel can make no reasonableestimate of the company’s ultimate liability at this time . . . . . . . . . . . . . . . . . . . . 400,00020-year bond issue that matures in two years. The entireamount will be repaid from a bond sinking fund . . . . . . . . . . . . . . . . . . . . . . . . . . 750,000Accrued interest on the 20-year bond issue as of the balancesheet date . . . . . . . . . . . . . . . . . . .…
ROSE Company entered into a lawsuit on December 20, 2021 and recognized on the same date a provision of ₱2,000,000. On February 28, 2022, when the financial statements for the year ended December 31, 2021 had not yet been authorized for issue, the case was settled and the court decided the final total damages to be paid by the entity at ₱3,000,000. In addition, the Company has a loan payable of ₱2,000,000 due on June 30, 2022. On January 1, 2022, before the authorization of the issuance of financial statements, the bank agreed to refinance the loan, extending the maturity to June 30, 2024. Also, another loan amounting to ₱7,000,000 due on December 1, 2022 was obtained by the Company on January 2, 2022 from BPI. ROSE Company has the discretion to refinance or roll over the loan for at least twelve months from December 31, 2022. At what amount should the non-current liability be presented in the statement of financial position? ₱ 2,000,000 ₱…