The company’s building was appraised at the start of 2021. The report of the actuary indicated the following data: Historical Cost Appraised Value Cost P 200,000.00 P 360,000.00 Accumulated Depreciation 80,000.00 120,000.00 P 120,000.00 P 240,000.00 The company depreciated its building for the year 2021 equal to 10% of the appraised value. Based on the report of the appraiser, the remaining life of the building is 5 years.Required: adjusting entries You have been engaged to audit FAR EASTERN COMPANY, a new client, for the year ended,December 31, 2021. The company prepared the trial balance set forth below, as of December 31,2021,theclose of its second year of operations.Account TitlesUnadjusted Trial BalanceDebitCreditCash112,600.00Marketable Securities72,000.00Allowance for decline in value of securitiesAccounts Receivable - Trade1,758,220.00Allowance for doubtful accounts40,000.00Accounts Receivable - OthersAdvances to affiliate48,000.00250,000.00Inventory, December 31, 2021Property, Plant and EquipmentAccumulated Depreciation2,770,000.00Accounts PayableIncome Tax PayableLong-term DebtOrdinary Share CapitalRetained EarningsRevaluation IncrementSalesCost of Sales2,269,604.00170,622.00Operating ExpensesOther Charges100,000.00Provision for Income Taxes (35%)80,954.00Discontinued Operations (Net)6,500.00Cumulative Effect of Change in Accounting Principle (Net)13,000.007,691,500.0020,000.0068,100.001,240,000.00408,616.0071,260.0060,000.002,042,000.00770,000.00240,000.002,771,524.007,691,500.00

Adjusting Entry: It is the entry to adjust correct amount of revenue and expenses to each…

The company’s building was appraised at the start of 2021. The report of the actuary indicated the following data: Historical Cost Appraised Value Cost P 200,000.00 P 360,000.00 Accumulated Depreciation 80,000.00 120,000.00 P 120,000.00 P 240,000.00 The company depreciated its building for the year 2021 equal to 10% of the appraised value. Based on the report of the appraiser, the remaining life of the building is 5 years. Required: adjusting entries

The company’s building was appraised at the start of 2021. The report of the actuary indicated the following data: Historical Cost Appraised Value Cost P 200,000.00 P 360,000.00 Accumulated Depreciation 80,000.00 120,000.00 P 120,000.00 P 240,000.00 The company depreciated its building for the year 2021 equal to 10% of the appraised value. Based on the report of the appraiser, the remaining life of the building is 5 years. Required: adjusting entries

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

Chapter4: The Balance Sheet And The Statement Of Shareholders' Equity

Section: Chapter Questions

Problem 5C: It is February 16, 2020, and you are auditing Davenport Corporation's financial statements for 2019...

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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.
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Subsequent Event Below here were subsequent event that occurs in your client. Consider that all events were has material effect on client’s financial statement. The auditor is auditing financial statement for the year ended December 31, 2020 and is completing the audit in March 15, 2021.1) On January 12, 2021, auditor found that client made overstatement to their longlived asset account on 2020 year-end financial statement2) On January 31, 2021, client announced that they do stock split 2 for 1 for their entire common shares 3) The client purchased raw material that was received just before year-end. The purchase was recorded based on its estimated value. The invoice was not received until February 5, 2021, and the cost was substantially different than was estimated4) On February 15, 2021, the civil court decided that Client Company must pay compensation loss due to defect product sold to their customer. lawsuits started in court since June 20205) On February 20, 2021, a major of…
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