EXERCISE I 6Red Inc. has experienced several poor earnings and has several assets on its books that are undervalued. It desires torevalue its assets and eliminate the deficit. At December 31,2020, the company owns the following identifiable assets:CostAccumulatedBook valueFair valueDepreciationInventoryP IMP IMP 0.7MLand5 M5 M6.5 MBuildings7.5 MР 3.5 М4.0 M5.0 M1.5 MMachinery &Equipment3.5 М2 M2.2 MThe statement of financial position on December 31,2020, reported a deficit of P 2,000,000.REQUIRED:Journal entries to record the quasi-reorganization.

Lets start with basic understanding regarding quasi reorganization. Quasi reorganization means a…

Answered: Red Inc. has experienced several poor…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter5: Sales And Receivables

Section: Chapter Questions

Problem 65E: Average Uncollectible Account Losses and Bad Debt Expense The accountant for Porile Company prepared...

See similar textbooks

Similar questions

Average Uncollectible Account Losses and Bad Debt Expense The accountant for Porile Company prepared the following data for sales and losses from uncollectible accounts: Required: 1. Calculate the average percentage of losses from uncollectible accounts for 2015 through 2018. 2. Assume that the credit sales for 2019 are $1,260,000 and that the weighted average percentage calculated in Requirement 1 is used as an estimate of loses from uncollectible accounts for 2019 credit sales. Determine the bad debt expense for 2019 using the percentage of credit sales method. 3. CONCEPTUAL CONNECTION Do you believe this estimate of bad debt expense is reasonable? 4. CONCEPTUAL CONNECTION How would you estimate 2019 bad debt expense if losses from uncollectible accounts for 2018 were What other action would management consider?
ABC Company’s statement financial statement shows a deficit on retained earningsamounting to P260,000. To eradicate the said deficiency, the company was to authorized bythe commission to have the revaluation of its assets and liabilities. The following were therevaluation:a. The receivable balance will be decreased to P40,000.b. The total fixed assets from its book value of P1,900,000 shall be revalued for P1,500,000and the P700,000 accumulated depreciation attached from the original book value shall bezero out.c. P50,000 of the other liabilities account shall not be recognized.Required:a. Prepare the necessary entries for the revaluation of assets and liabilities in the quasireorganization activity.b. Prepare the statement of financial position as of January 1, 2020 after the revaluationprocess.
Bol Company's December 31 year-end financial statements had the following errors: December 31, 2020 December 31, 2021 Prepaid insurance 16,000 understated Unearned rental 10,000 understated Depreciation expense 7,200 understated Ending inventory 27,000 understated 39,600 overstated There were no other errors during the year 2020 or 2021 and no corrections have been made for any of the errors. (Ignore income tax considerations) 1. What is the net effect of the errors on Bols 2021 net income? 2. What is the net effect of the errors in Bols December 31, 2021 retained earnings? 3. What is the net effect of the errors in Bol's December 31, 2021 working capital (current assets less current liabilities)?
Consider the following worksheet with information extracted from a financial statement:2020 Assets Liabilities EquityReported (P) 400 000 100 000 300 000You identify that a firm has incorrectly recognized revenue on P50 000 worth of goods in the form of receivables. You decide to reverse this sale and the associated inventory which has a value of P40 000. Using the worksheet approach and assuming a corporate tax rate of 30 percent, what would be the adjusted debt to assets ratio?
The following is a portion of the current asset section of the balance sheets of HiROE Co., at December 31, 2020 and 2019: 12/31/20 12/31/19 Accounts receivable, less allowance for uncollectibleaccounts of $23,000 and $11,000, respectively $457,000 $359,000 e-2. What factors might have caused the change in this ratio? Check All That Apply Credit was extended to proportionately more slow-paying or high credit-risk customers during 2020. Credit was extended to proportionately more slow-paying or high credit-risk customers during 2020. Credit was extended to proportionately more slow-paying or lower credit-risk customers during 2020. Credit was extended to proportionately more slow-paying or lower credit-risk customers during 2020. Credit was extended to proportionately more slow-paying or high credit-risk customers during 2019. Credit was extended to proportionately more slow-paying or high credit-risk customers during 2019. Credit was extended…
How should the company respond to the ongoing situation to mitigate risk of failing the working capital given the following financial ratio? 1. Liquidity ratio : current ratio: 2.61xquick ratio: 2.56cash ratio: 0.85 2. Accounts receivable turnover: 4.08Ave collection period: 89.46 days 3. Inventory turnover: 38.76ave age of inventory: 9.42 4. Average payable turnover: 1.04ave payment period: 350.96 Note: Their working capital is 22,887,683 Current asset (37,127,683) - current liabilities (14,260,065) = 22,887,683
Q: The Shannon corporation deals in textile products.Due to certain reasons the company was closed and records of same are out of access now except given below. Use the given information to make balance sheet for year 2019 d) Sales. $750,000 e) Total assets turnover 2.5 times f) Cash to total assets. 2.0 percent g) Accounts Receivable Turnover 10.0 times h) Inventory turnover 15.0 times i) Current Ratio 2.0 times j) Debt to total assets 45.0 percent Note : the other part is given below on the form of picture.
39. Pineapple Company has recorded bad debts expense in the past at a rate of 1.5% of net sales. In 2021, Pineapple decides to increase the estimate to 2%. If the new rate has been used in prior years, cumulative bad debts expense would have been P380,000 instead of P285,000. In 2021, bad debts expense will be P120,000 instead of P90,000. What amount of bad debts should the company report in its statement of comprehensive income as a result of a change in the estimate? a. P120,000 b. P-0- c. P95,000 d. P64,600
Nabil Biscuits interested to maintain the current ratio is 1.5 for the year 2020. The company wishes to maintain more than 2, Analyse which of the following would NOT improve the current ratio of the company? a. Sell common stock to reduce current liabilities b. Borrow short term to finance additional fixed assets c Issue long-term debt to buy inventory d. Sell fixed assets to reduce accounts payable
Assume that Waterway Company has recently fallen into financial difficulties. By reviewing all available evidence on December 31, 2020, one of Waterway’s creditors, the National American Bank, determined that Waterway would pay back only 65% of the principal at maturity. As a result, the bank decided that the loan was impaired. The loss is estimated to be $239,300.What entry should National American Bank make to record this loss?
1. What is the total effect of the errors on the 2020 net income? a. Overstated by P80,400b. Understated by P775,800c. none of the choicesd. Understated by P1,236,600e. Overstated by P165,000 2. What is the total effect of the errors on the balance of the company's retained earnings at December 31. 20217 a. Understated by P155,100b. none of the choicesc. Understated by P265,800d. Overstated by P930,900e. Overstated by P885,900
An entity reported the following information for the year ended December 31, 2020: Sales 7,750,000 Cost of goods sold 2,400,000 Administrative expenses 700,000 Loss on sale of equipment 100,000 Sales commissions 500,000 Interest revenue 450,000 Freight out 150,000 Loss on early extinguishment of long-term debt 200,000 Doubtful accounts expense 150,000 16. What is the income from continuing operations for 2020? a. 4,000,000 b. 3,800,000 c. 2,800,000 d. 2,600,000 17. What net amount of loss should be reported as results of discontinued operations for 2020? a. 1,500,000 b. 1,700,000 c. 1,050,000 d. 1,400,000 18. What is the net income for 2020? a. 2,500,000 b. 1,750,000 c. 1,400,000 d. 1,540,000

SEE MORE QUESTIONS

Recommended textbooks for you

Cornerstones of Financial Accounting

Accounting

ISBN:

9781337690881

Author:

Jay Rich, Jeff Jones

Publisher:

Cengage Learning

Fundamentals Of Financial Management, Concise Edi…

Finance

ISBN:

9781337902571

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Cornerstones of Financial Accounting

Accounting

ISBN:

9781337690881

Author:

Jay Rich, Jeff Jones

Publisher:

Cengage Learning

Fundamentals Of Financial Management, Concise Edi…

Finance

ISBN:

9781337902571

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS