MFRS Standards.
Q: One of Rose’s suppliers, Powder Bhd, had adverse publicity due to the issue of cleanliness of its…
A: A contingent asset is an asset that depends upon the future events of the Company. These are the…
Q: Williams-Santana, Inc., is a manufacturer of high-tech industrial parts that was started in 2009 by…
A: SOLUTION- ACCOUNTING CHANGES AND ERROR CORRECTIONS REFER TO THE GUIDELINE PROVIDE TO REFLECT THESE…
Q: 1. At December 31, 2019, Jolie Inc. had a receivable of $500,000 from Relic Inc. on its statement of…
A: The first question is answered for you. Please resubmit specifying the question number you want…
Q: A company had to pay R15 million in respect of customers’ claims for injuries suffered from goods…
A: Despite any authoritative constraints of obligation, if Associate in Nursing item or any of its…
Q: Crunch Craft, a catering company, provides catering services to its customers. Customers normally…
A: The balance sheet represents the financial position of the business with assets and liabilities on a…
Q: The following transaction relate to Tool Company’s contingencies. The financial statements are dated…
A: INTRODUCTION; Liabilities are the debts owed by your business to third parties. They represent the…
Q: A business has been involved in a lawsuit that they have lost in court. The judge has ordered money…
A: An annuity is a long-term commitment that an insurance provider issues and is intended to help…
Q: The following issues of Provi Ltd. are still outstanding at the yearend. Help the accountant to…
A: Provisions are created for liabilities of uncertain timing or amount. contingent liabilities are…
Q: On November 1, 2019, Gerakos Corporation sold software and a six-month technical support contract to…
A: Calculate the sales price of software:
Q: During August 5, 2020, Hiro marketing sold an item worth P 500,000 for P 750,000. The required down…
A: Accounting's goals include keeping a systematic record of all financial transactions in a book of…
Q: If answered within 40mins,it would be appreciable!! Denny Company uses accrual accounting and issues…
A:
Q: On May 1, 2020, Zuhoor Muscat Company agreed to provide services for SQU of RO 200,000, over the…
A: Total amount paid on August 31, 2020 = Total amount of services x 35% = RO 200000 x 35% = RO 70000
Q: accounting treatments
A: Contingent liabilities are liabilities that may arise in future period due to the outcome of an…
Q: On Jan 1,2020, Kim Co. supplies amounted to P2,500. During the year, thecompany purchased P1,200…
A: Office supplies means the any product used in office on regular basis. We can not say that amount of…
Q: A business has been involved in a lawsuit that they have lost in court. The judge has ordered money…
A: An annuity is a long-term commitment that an insurance provider issues and is intended to help…
Q: sent Rover Ltd has a year-end of 30 June 2022. The accountant has prepared the following schedule…
A: The accounting should be accordings with the generally accepted Accounting principles and…
Q: Foxcoon is a technological solution provider business with a year-end 31st March 2021.You have…
A: Factoring is described as a process in which one party buys the debts of the business. It is also…
Q: accounting treatments f
A: Contingent liability is a term used in accounting to denote a liability that is contingent upon the…
Q: (a) Lara Croft has been hired as a new auditor for Jolie Inc. Ms. Croft has suggested the following…
A: Accounting policies indicate the rules and standards requires to follow for the preparation of…
Q: Halwings Group Ltd, a company operating in Kenya has the following information as at 1st December…
A: Tax is a kind of income the government generates through collecting some part of income from…
Q: NOREEN INC, a truck dealer, sells a truck on January 1, 2019, to MENDOZA INC for P3,000,000. NOREEN…
A: Given : NOREEN INC, sells a truck to MENDOZA INC = P3,000,000 NOREEN agrees to repurchase the…
Q: A business has been involved in a lawsuit that they have lost in court. The judge has ordered money…
A: Semi annual payment (A)=$14,000 Duration (n)=15*2=30 periods Rate of interest per period (i)…
Q: A business has been involved in a lawsuit that they have lost in court. The judge has ordered money…
A: Present Value of Annuity due will be used to calculate the present value of annual payments to the…
Q: Santana Rey, owner of Business Solutions, realizes that she needs to begin accounting for bad debts…
A: Adjusting journal entry: At year end when company finalise its accounts then any unrecognized income…
Q: In the year 20X1, a lawsuit erupts between TK and its supplier KT. The legal dispute is expected to…
A: Accruals basis of recording the transactions is to use the accrual concept or principles of…
Q: At December 31, 2019, Jolie Inc. had a receivable of $500,000 from Relic Inc. on its statement of…
A: Since you have asked so many questions with same numerical name, We will be answering the first 3…
Q: Green Mandarin Restaurant’s books for 2020 have been closed. As its accountant you just realized…
A: The journal entry to rectify the overstated depreciation expense is presented hereunder :
Q: On January 1, 2021, Weaver Corporation purchased a patent for $231,000. The remaining legal life is…
A: Amortization expense = Cost of patent / Estimated useful life = $231,000 / 6 = $38,500 Amortization…
Q: A business has been involved in a lawsuit that they have lost in court. The judge has ordered money…
A: The plaintiff is about to receive $14,000 every quarter for 20 years. So, the total amount of…
Q: On 1 July 2019, Cassblanka Ltd sells a construction vehicle to Tradon Ltd. The vehicle cost…
A:
Q: On January 31, 2022, RUBY Company agreed to pay the former president P300,000 under a deferred…
A: Introduction: Deferred compensation is a type of compensation plan that allows employees to delay…
Q: . Ali Company borrowed OMR50, 000 in December 2019 for a period of three months from Azzan and will…
A: In the given case, OMR 50,000 is the total borrowing amount for which the interest expense is total…
Q: August 2019, Baguio City brought an action against the company for polluting the surrounding rivers…
A: As per IFRS 37, A provision is an present obligation which arises from past event and outflow of…
Q: (a) Lara Croft has been hired as a new auditor for Jolie Inc. Ms. Croft has suggested the following…
A: a1 It is a change in accounting estimate as the uncollectible receivables are accounting estimates…
Q: B Ltd is a company in the chemical industry, situated near the Edward River. Its year end is 30th…
A: Business Risk is a risk resulting from significant conditions, events, circumstances, actions, or…
Q: Apple plc is a manufacturing company and its year close at 31 December. On October 2020, Apple plc…
A: Meaning of Provision :- A provision is a liability of uncertain timing or amount. The liability may…
Q: ra Croft has been hired as a new auditor for Jolie Inc. Ms. Croft has suggested the following…
A: Step 1 Accounting policy are the principles or rules which are considered by an entity while…
Q: The newly qualified accountant of Parmesan Limited is busy finalizing the financial statements of…
A: Current tax is the amount of income taxes payable/recoverable in relation to a period's current…
Q: Ali Company borrowed OMR50, 000 in December 2019 for a period of three months from Azzan and will…
A: (a) This reporting of $500 interest expense in 2019 financial statement shows the accrual concept of…
Q: Falcon Ltd is a software company and in on 1st of Oct 2020 it sold its software product to Mira Ltd…
A: Answer:- Financial statement:- Financial statement are those written documents which describe a…
Q: Mathys Inc. has recently hired a new independent auditor, Karen Ogleby, who says she wants “to get…
A: a. Classify the given following.
Q: The net income of Sogo & Sons, a department store, decreased sharply during 2019. Mohan Sogo,…
A: Net income is the amount earned. It is the part of revenues that are left after deducting all the…
Q: What are the supplies and Supply expense at the end of the accounting period?
A: It is pertinent to note that supplies account is a current asset . It includes Printing and…
Q: ABC Company sells cars. In 2018, the entity sold 1,000 units before discovering a significant defect…
A: As per accounting standard Following is the criteria to create contingent liabilities.
Q: A business has been involved in a lawsuit that they have lost in court. The judge has ordered money…
A: The present value function or concept can be used to determine the present value of a future sum or…
Q: A business has been involved in a lawsuit that they have lost in court. The judge has ordered money…
A: Present Value of annuity due and Future Value of annuity due formula will be used to calculate the…
Sid Berhad year end is 31 December 2020. The accountant of Sid Berhad has asked for your opinion on the accounting treatment of the following items:
(iv) Sid Berhad is facing a claim due to a defective product for RM120,000 from a customer. The legal opinion is that the claim will succeed, but Sid will be able to reclaim 80% of the amount from Mentari Sdn Bhd, who supplied the malfunctioned product.
Required:
Advise Sid Berhad’s accountant on the accounting treatments for all the above- mentioned items. Your answer shall make reference to relevant MFRS Standards.
Step by step
Solved in 2 steps
- It is February 16, 2020, and you are auditing Davenport Corporation's financial statements for 2019 (which will be issued in March 2020). You read in the newspaper that Travis Corporation, a major customer of Davenport, is in financial difficulty. Included in Davenports accounts receivable is 50,000 (a material amount) owed to it by Travis. You approach Jim Davenport, president, with this information and suggest that a reduction of accounts receivable and recognition of a loss for 2019 might be appropriate. Jim replies, Why should we make an adjustment? Ted Travis, the president of Travis Corporation, is a friend of mine; he will find a way to pay us, one way or another. Furthermore, this occurred in 2020, so lets wait and see what happens; we can always make an adjustment later this year. Our 2019 income and year-end working capital are not that high; our creditors and shareholders wouldnt stand for lower amounts than they already are. Required: From financial reporting and ethical perspectives, prepare a response to Jim Davenport regarding this issue.Shannon Corporation began operations on January 1, 2019. Financial statements for the years ended December 31, 2019 and 2020, contained the following errors: In addition, on December 31, 2020, fully depreciated machinery was sold for 10,800 cash, but the sale was not recorded until 2021. There were no other errors during 2019 or 2020, and no corrections have been made for any of the errors. Refer to the information for Shannon Corporation above. Ignoring income taxes, what is the total effect of the errors on the amount of working capital (current assets minus current liabilities) at December 31, 2020? a. working capital overstated by 4,200 b. working capital understated by 5,800 c. working capital understated by 6,000 d. working capital understated by 9,800At the end of 2019, Framber Company received 8,000 as a prepayment for renting a building to a tenant during 2020. The company erroneously recorded the transaction by debiting Cash and crediting Rent Revenue in 2019 instead of 2020. Upon discovery of this error in 2020, what correcting journal entry will Framber make? Ignore income taxes.
- Sid Berhad year end is 31 December 2020. The accountant of Sid Berhad has asked for your opinion on the accounting treatment of the following items: (v) One of Sid Berhad’s product has suffered some bad publicity as a result of a customer claiming to have harm his health condition. The customer filed a court case in December 2020 claiming damages of RM100,000. Sid’s lawyer advised the company that the most probable outcome is that the company will have to pay the customer RM80,000. Required: Advise Sid Berhad’s accountant on the accounting treatments for all the above- mentioned items. Your answer shall make reference to relevant MFRS Standards.Beautiful Company is involved in litigation regarding a faulty product sold in a prior year during 2021. The company has consulted with its attorney and determined that it is possible that they may lose the case. The attorneys estimated that there is a 40% chance of losing. If this is the case, their attorney estimated that the amount of any payment would be P500,000.How much is the Provision to be reported at December 31, 2021?On November 5, 2020, a Dunn Company truck was in an accident with an auto driven by Bell. The entity received notice on January 12, 2021 of a lawsuit for P700,000 damages for personal injuries suffered by Bell. The entity's counsel believed it is probable that Bell will be awarded an estimated amount in the range between P200,000 and P500,000. The possible outcomes are equally likely. The accounting year ends on December 31 and the 2020 financial statements were issued on March 31, 2021. What amount of provision should be accrued on December 31, 2020?
- During 2019, Maricar Company guaranteed a supplier’s P5,000,000 loan from a bank. On October 1, 2020. Maricar was notified that the supplier had defaulted on the loan and filed for bankruptcy protection. The counsel believes Maricar will probably have to pay between P2,500,000 and P4,500,000 under its guaranty. As a result of the supplier’s bankruptcy, Maricar entered into a contract in December 2020, to retool its machines so that Maricar could accept parts from other suppliers. Retooling costs are estimated to be P3,000,000. What amount should Maricar report as a liability in its December 31, 2020 balance sheet? Group of answer choices A.) 4,500,000 B.) 5,000,000 C.) 5,500,000 D. ) 2,500,000Pearl Ltd is preparing financial statements for the year ended on 30 June 2021. Identify and match each of the following statements to the most appropriate accounting treatment. An amount of $50 000 owing to Joyce Ltd for services rendered during May 2021. Damages awarded against Pearl Ltd resulting from a court case decided on 20 June 2021. The judge has announced that the amount of damage will be set at a future date, expected to be in September 2021. Pearl Ltd has received advice from its lawyers that the amount of the damages could be anything between $1 million and $3 million. Pearl Ltd involved in a litigation related to their products sold on 1 Feb 2021. Legal advisers estimate that it is reasonably possible that the company will lose the lawsuit. They also estimate the expenditure of this lawsuit to be $10,000. Pearl Ltd operates profitably in a factory that it has leased and on which it pays quarterly rentals. It decides to relocate its operations to another facility.…Mathys Inc. has recently hired a new independent auditor, Karen Ogleby, who says she wants “to get everything straightened out.” Consequently, she has proposed the following accounting changes in connection with Mathys Inc.'s 2020 financial statements. 1. At December 31, 2019, the client had a receivable of $820,000 from Hendricks Inc. on its balance sheet. Hendricks Inc. has gone bankrupt, and no recovery is expected. The client proposes to write off the receivable as a prior period item. 2. The client proposes the following changes in depreciation policies. a. For office furniture and fixtures, it proposes to change from a 10-year useful life to an 8-year life. If this change had been made in prior years, retained earnings at December 31, 2019, would have been $250,000 less. The effect of the change on 2020 income alone is a reduction of $60,000. b. For its new equipment in the leasing division, the client proposes to adopt the sum-of-the-years'-digits depreciation method. The…
- Sid Berhad year end is 31 December 2020. The accountant of Sid Berhad has asked for your opinion on the accounting treatment of the following items: (iii) During the year, Sid Bhd received a claim for RM1 million from one of its workers, Daniel. Daniel is now paralysed with head injuries after metal scaffolding that was under construction collapsed at building site. The insurance company refused to meet the claim on the ground that Daniel was found not wearing a protective helmet at the time of accident. In the opinion of Sid’s legal advisor, the company would have to settle the claim between RM100,000 to RM400,000, depending on whether the paralysis is temporary or permanent. The medical opinion is that there is a 20% chance that the paralysis will be permanent. Required: Advise Sid Berhad’s accountant on the accounting treatments for all the above- mentioned items. Your answer shall make reference to relevant MFRS Standards.Smart Company provided the following information as of December 31, 2019:• Smart is the plaintiff in a lawsuit which would award damages normally set at the maximum of P1,000,000. Its legal counsel believes that is it probable that the action filed will be enforced by the court.• The entity is defending a lawsuit for patent infringement. The entity’s legal counsel believes that there is a 25% chance that the business will win the lawsuit. Damages payable ranges from P600,000 to P1,800,000.• On February 16, 2020, the local government is in the process of investigating an environmental violation committed by the entity last November. It is probable that the business will pay fees in relation to said violation and estimates the best amount at P1,000,000.• Smart is also involved in a lawsuit for a dispute with a customer. On December 31, 2019, the attorneys believe that it will remotely result to a favorable outcome. Expected damages would be 50% for P1,000,000, 20% for P3,000,000 and 30%…Ali Company borrowed OMR50, 000 in December 2019 for a period of three months from Azzan and will make its interest payment three months later. The total interest for the three months will be OMR 1500. At the end of the year 2019 in the financial statement, the company reported Interest Expense of OMR 500 in Income Statement. a. This action was the result of which accounting principle? Explain. b. Do you think, the borrowed money will increase the assets/ Liabilities of the business? Yes/ No Justify your answer.
