Subsequent knowledge of which of the following would cause the entity to adjust its December 31 financial statements?a. Sale of an issue of new stock for $500,000 on January 30.b. Settlement of a damage lawsuit for a customer’s injury sustained February 15 for $10,000.c. Settlement of litigation in February for $100,000 that had been estimated at $12,000 in the December 31 financial statements.d. Storm damage of $1 million to the entity’s buildings on March 1.

Q: An entity is a resort located in Palawan. The entity collects cash when guests make a reservation.…

A: Unearned revenue represents the liability for the company. Therefore, if it has been earned by the…

Q: Prepare the necessary adjusting entries at December 31, 2018, for the Falwell Company for each of…

A:

Q: Required information [The following information applies to the questions dlisplayed below.) Selected…

A: The financial statements of the Company are prepared to show its financial picture to all the…

Q: 13. Upon inspection of the records of Compact Company, the following facts were discovered for the…

A: Profit refers to the amount of income generated by the firm in addition to the goods sold. Every…

Q: The following pre‐adjustment trial balance appeared in the books of Musketeer Traders at the end of…

A:

Q: (Analysis of Three Accounting Changes and Errors) The following are three independent, unrelated…

A: Situation 1: (a) Changing to the correct principle from the wrong accounting principle is a change…

Q: Subtitle Incorporated, a limited liability company, has an accounting year end of 31 December. The…

A: Adjusting Entry – Adjusting Entries are the entries that make the accrual principle work for the…

Q: The errors below were noted after the books of CalMart Corporation were audited at the close of 2021…

A: The adjustment entries are to be recorded to adjust the net income or losses of the future.

Q: On December 12, 2021, an equity investment costing $80,000 was sold for $100,000. The investment was…

A: Gain on sale of Investment = Sales price - Carrying value = $100,000 - $75,000 = $25,000

Q: If answered within 40mins,it would be appreciable!! Denny Company uses accrual accounting and issues…

A:

Q: On December 30 of the current year, KPMG signs a $150,000 contract to provide accounting services to…

A: Revenue recognition principle says that revenue of a particular period should match with its…

Q: Subtitle Incorporated, a limited liability company, has an accounting year end of 31 December. The…

A: Trial balance is the statement prepared to check if the debits in the books are equal to credits.

Q: You discovered the following errors in connection with your examination of the financial statements…

A: Non-Counterbalancing errors are those errors that do not get adjusted with the next year's figures…

Q: On Nov. 25, 2017, an explosion occurred at Stefan company causing extensive property damage to area…

A: Liability is the amount which the business owes to creditors of the company. While as, contingent…

Q: . An entity is a resort located in Boracay. During December 2019, PICPA held an annual conference at…

A: Step 1 As per the accounting concept of duality, every transaction has a dual effect which maintains…

Q: The following transactions were completed by Daws Company during the current fiscal year ended…

A: 1. Record the January 1 credit balance of $25,795 in a T account for Allowance for Doubtful…

Q: 1. Sub-Title Incorporated, a limited liability company, has an accounting year end of 31 December.…

A: It is the first step to record the financial transactions in the books of accounts that have dual…

Q: Polska SA, in preparation of its December 31, 2019, financial statements, is attempting to determine…

A: a. Following are the journal entries for the situations: Formulation:

Q: On December 31, Trinkets Supply Company noted the following transactions that occurred during 2015,…

A: In bookkeeping, transactions pass through different accounts.

Q: vRay Solutions decided to make the following changes in its accounting policies on January 1,…

A:

Q: Identify whether the following should be Recognised, Disclosed or Ignored when Daleside Co is…

A: In the above events majority can be termed as contingent liability and few may…

Q: The adjusted trial balance of ABC Co. included the following expenses for 2020: Accounting and legal…

A: Administrative expenses are not related directly to any function such as sales or manufacturing.…

Q: For each of the following situations, indicate the amount shown as a liability on the balance sheet…

A: Liabilities are of 2 types: 1) Current Liabilities2) Non -current liabilities

Q: Required Answer each of the following questions by providing supporting computations. 1. Assume that…

A: hey there since you have posted multiple questions, we can answer only first question, please…

Q: Ginger Ltd is completing its financial statements for the year ended 30 June 2020. In undertaking…

A: As per IAS 8 ( Accounting policies, changes in Accounting estimates and Errors) , prior period…

Q: The following selected circumstances relate to pending lawsuits for Erismus, Inc. Erismus’s fiscal…

A: Contingent Liability:   Contingent liability refers to any potential liability that can occur…

Q: AAA corporation unadjusted trial balance follows.  On December 31, 2020, the accountant noticed that…

A: The income statement and balance sheet are the financial statements of the business.

Q: YG Company has a loan due for repayment in six-month time, but it has discretion to refinance for…

A: Non-current liabilities are liabilities that are due after a year or more. Non-current liabilities…

Q: Indicaté if the following adjusting items. If they are adjusting items discuss the effect on the…

A: Adjusting events - Are those that provide additional evidence of conditions that existed at the…

Q: Explain whether Colston Company correctly reported the following items in the financial…

A: (a)Extraordinary Items: There are times when a company faces unusual and infrequent gains and…

Q: Nia company is involved in litigation regarding a faulty product sold in a prior year. The entity…

A: There is a 40% chance of losing the case and in case of losing the case the payment would be…

Q: On December 31, Trinkets Supply Company noted the following transactions that occurredduring 2015,…

A: Net Income is the income of company when all the costs expenditure in a financial year are…

Q: Problem 2: Janmark Company provided the following selected transactions related to contingencies.…

A: Provision account: Provision account can be defined as the account that holds the information about…

Q: The following selected circumstances relate to pending lawsuits for Erismus, Inc. Erismus’s fiscal…

A: Contingent LiabilityContingent liability is one form of liability that arises based on a particular…

Q: Allen Company received $12,000 cash from Gerry Corporation for cleaning services that Allen agrees…

A: Date Particulars Debit Amount Credit Amount June 1, Year 1 Bank A/c ......................Dr…

Q: Hentzel Landscaping commenced its business on January 1, 20X1.   During its first year of…

A: Journal entries are passed to record the economic transactions that take place in the business…

Q: Selected account balances from the adjusted trial balance for Olinda Corporation as of its calendar…

A: SOLUTION- EXPLANATION-                                  INCOME STATEMENT SALES 1017500…

Q: If an entity that uses a calendar year period and reports on an annual basis changes its business…

A: Calander year is the year which begin on 1 January and ends on 31 december. We are given that,…

Q: The following accounts are extracted from the worksheet of X Company on December 31, 2020: Income…

A: 1. Discontinued Operations - Discontinued Operations are the those operation those are discontinued…

Q: n July 1, 2011, AAA, a franchisor, entered into a franchise agreement with EE, a franchisee. The…

A: The given question relates to franchise accounting. The revenue received by the seller will not be…

Q: The following are independent events. For each change or error select how it would be accounted for.…

A: ‘’Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: At the beginning of the year, A Corporation had $5,000 worth of office supplies. During the year,…

A: Formula: Supplies expense = Beginning supplies + Purchases - Ending supplies

Q: 15. Iriga Company issued its 2011 financial statements on March 1, 2012. The following data are…

A: Provision :-  Provision is a liability which can be measured only by using a substantial degree of…

Q: In early January 2020, Sunland Corporation applied for and received approval for a trade name,…

A: Given,    Total Legal fee paid in Early January 2020: $ 44800: Applied and received approval for…

Q: a. Depreciation on the company's equipment for the year is computed to be $15,000. b. The Prepaid…

A: Adjusting entries are prepared by management to ensure the accrual basis accounting system. It is…

Q: Ngata Ltd. insured under a loss of profits policy of Sh.16,000,000. The company’s premises were…

A: a) We have to first Calculate loss of profit for insurance claim.   1. Rate of gross profit=(Net…

Q: The following account balances appear in the 2021 adjusted trial balance of Blue Devils Corporation:…

A: Classified Balance Sheet In the balance sheet which indicate the details of total assets,…

Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.