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Hard Company placed orders to DIFFICULT for the year 2021 that will result to the following amount of sales: 1st quarter 2nd quarter 3rd quarter 4th quarter 1,100,000 1,900,000 950,000 850,000 A 10% rebate is provided if Hard buys at least P5 million of goods each year. In 2020, Hard's purchases amounted to P5.6 million and is again expected to exceed the P5 million threshold in 2021. • In January 31, 2021, DIFFICULT paid P240,000 of participation fee to a trade convention which will happen in the 2nd quarter of the year. • On May 30, 2021, DIFFICULT contracted Challenging Events and paid P480,000 for a series of social media advertisements that will run in the 3rd quarter of the year. Because of its grand nature, it is expected that the benefit of this advertisement will extend until the end of the year. • On April 1, 2021, the city government assessed DIFFICULT for real property taxes for the year 2021 amounting to P320,000. • DIFFICULT incurs annual machine repair costs of P150,000 on November 1, 2021. • In December 2020, the Board of Directors announced a "base bonus" for managerial employees of P1,500,000 if DIFFICULT's sales for 2021 will reach P50,000,000 (before any sales rebates), with bonus decreasing by P100,000 for every million of sales not achieved, and increasing by P200,000 for every million of excess sales. • On January 1, 2022, DIFFICULT's bookkeeper reported the following 2021 sales and cost of goods sold details: Sales Cost of sales 1st quarter 2nd quarter 3rd quarter 4th quarter 13,000,000 P. 8,000,000 12,500,000 6,200,000 15,500,000 7,500,000 14,000,000 9,700,000 • Income tax rates for each quarter were as follows: 1st quarter 2nd quarter 3rd quarter 27% 4th quarter 25% 32% 30%

Hard Company placed orders to DIFFICULT for the year 2021 that will result to the following amount of sales: 1st quarter 2nd quarter 3rd quarter 4th quarter 1,100,000 1,900,000 950,000 850,000 A 10% rebate is provided if Hard buys at least P5 million of goods each year. In 2020, Hard's purchases amounted to P5.6 million and is again expected to exceed the P5 million threshold in 2021. • In January 31, 2021, DIFFICULT paid P240,000 of participation fee to a trade convention which will happen in the 2nd quarter of the year. • On May 30, 2021, DIFFICULT contracted Challenging Events and paid P480,000 for a series of social media advertisements that will run in the 3rd quarter of the year. Because of its grand nature, it is expected that the benefit of this advertisement will extend until the end of the year. • On April 1, 2021, the city government assessed DIFFICULT for real property taxes for the year 2021 amounting to P320,000. • DIFFICULT incurs annual machine repair costs of P150,000 on November 1, 2021. • In December 2020, the Board of Directors announced a "base bonus" for managerial employees of P1,500,000 if DIFFICULT's sales for 2021 will reach P50,000,000 (before any sales rebates), with bonus decreasing by P100,000 for every million of sales not achieved, and increasing by P200,000 for every million of excess sales. • On January 1, 2022, DIFFICULT's bookkeeper reported the following 2021 sales and cost of goods sold details: Sales Cost of sales 1st quarter 2nd quarter 3rd quarter 4th quarter 13,000,000 P. 8,000,000 12,500,000 6,200,000 15,500,000 7,500,000 14,000,000 9,700,000 • Income tax rates for each quarter were as follows: 1st quarter 2nd quarter 3rd quarter 27% 4th quarter 25% 32% 30%

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
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
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INTERIM FINANCIAL REPORTING

SOLID Company reported the following information relevant to its quarterly reporting for the year 2021:

How much is the net income for the first quarter?

 

Hard Company placed orders to DIFFICULT for the year 2021 that will result to the following amount of sales: 1st quarter 2nd quarter 3rd quarter 4th quarter 1,100,000 1,900,000 950,000 850,000 A 10% rebate is provided if Hard buys at least P5 million of goods each year. In 2020, Hard's purchases amounted to P5.6 million and is again expected to exceed the P5 million threshold in 2021. In January 31, 2021, DIFFICULT paid P240,000 of participation fee to a trade convention which will happen in the 2nd quarter of the year. On May 30, 2021, DIFFICULT contracted Challenging Events and paid P480,000 for a series of social media advertisements that will run in the 3rd quarter of the year. Because of its grand nature, it is expected that the benefit of this advertisement will extend until the end of the year. On April 1, 2021, the city government assessed DIFFICULT for real property taxes for the year 2021 amounting to P320,000. DIFFICULT incurs annual machine repair costs of P150,000 on November 1, 2021. • In December 2020, the Board of Directors announced a "base bonus" for managerial employees of P1,500,000 if DIFFICULT's sales for 2021 will reach P50,000,000 (before any sales rebates), with bonus decreasing by P100,000 for every million of sales not achieved, and increasing by P200,000 for every million of excess sales. On January 1, 2022, DIFFICULT's bookkeeper reported the following 2021 sales and cost of goods sold details: Sales Cost of sales 1st quarter 2nd quarter 3rd quarter 4th quarter 13,000,000 8,000,000 12,500,000 6,200,000 15,500,000 7,500,000 14,000,000 9,700,000 Income tax rates for each quarter were as follows: 1st quarter 2nd quarter 3rd quarter 27% 4th quarter 32% 30% 25%
Transcribed Image Text:Hard Company placed orders to DIFFICULT for the year 2021 that will result to the following amount of sales: 1st quarter 2nd quarter 3rd quarter 4th quarter 1,100,000 1,900,000 950,000 850,000 A 10% rebate is provided if Hard buys at least P5 million of goods each year. In 2020, Hard's purchases amounted to P5.6 million and is again expected to exceed the P5 million threshold in 2021. In January 31, 2021, DIFFICULT paid P240,000 of participation fee to a trade convention which will happen in the 2nd quarter of the year. On May 30, 2021, DIFFICULT contracted Challenging Events and paid P480,000 for a series of social media advertisements that will run in the 3rd quarter of the year. Because of its grand nature, it is expected that the benefit of this advertisement will extend until the end of the year. On April 1, 2021, the city government assessed DIFFICULT for real property taxes for the year 2021 amounting to P320,000. DIFFICULT incurs annual machine repair costs of P150,000 on November 1, 2021. • In December 2020, the Board of Directors announced a "base bonus" for managerial employees of P1,500,000 if DIFFICULT's sales for 2021 will reach P50,000,000 (before any sales rebates), with bonus decreasing by P100,000 for every million of sales not achieved, and increasing by P200,000 for every million of excess sales. On January 1, 2022, DIFFICULT's bookkeeper reported the following 2021 sales and cost of goods sold details: Sales Cost of sales 1st quarter 2nd quarter 3rd quarter 4th quarter 13,000,000 8,000,000 12,500,000 6,200,000 15,500,000 7,500,000 14,000,000 9,700,000 Income tax rates for each quarter were as follows: 1st quarter 2nd quarter 3rd quarter 27% 4th quarter 32% 30% 25%
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