ADVANCED ACCOUNTING
13th Edition
ISBN: 9781260773033
Author: Hoyle
Publisher: MCG
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Chapter 11, Problem 24P
a.
To determine
Determine the appropriate accounting for this lawsuit for the years ending December 31, 2017, and December 31, 2018, under (1) IFRS and (2) U.S. GAAP.
b.
To determine
Prepare the entry that the U.S. parent would make on the December 31, 2017, and December 31, 2018, conversion worksheets to convert IFRS balances to U.S. GAAP.
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On Feb, 5, 2017, an employee filed a P 2,000,000 lawsuit against Sans Co. for damages suffered when one of Sans' plant exploded on Dec, 29, 2016. The legal counsel believed the entity would probably lose the lawsuit and estimated the loss to be P 500,000. The employee offered to settle the lawsuit out of court for P 900,000 but the entity dis not agree to the settlement. On December 31, 2016, what amount should be reported as liability from lawsuit?
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Assume that a foreign company using IFRS is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S. GAAP to prepare consolidated financial statements. Ignore income taxes.
Required:
Prepare journal entries for this lawsuit for the years ending December 31, 2017, and December 31, 2018, under (1) IFRS and (2) U.S. GAAP.
Prepare the entry(ies) that the U.S. parent would make on the December 31, 2017, and December 31, 2018, conversion worksheets to convert IFRS balances to U.S. GAAP.
Harrington Company was sued by an employee in late 2017. General counsel concluded that there was an 75 percent probability that the company would lose the lawsuit. The range of possible loss is estimated to be $35,000 to $90,000, with no amount in the range more likely than any other. The lawsuit was settled in 2018, with Harrington making a payment of $70,000.
Assume that a U.S. based company is issuing securities to foreign investors who require financial statements prepared in accordance with IFRS . Thus, adjustments to convert from U.S. GAAP to IFRS must be made. Ignore income taxes.
a. Prepare journal entries for this lawsuit for the years ending December 31, 2017, and December 31, 2018, under (1) U.S. GAAP and (2) IFRS
b. Prepare the entries that Harrington would make on the December 31, 2017, and December 31, 2018, conversion worksheets to convert U.S. GAAP balances to IFRS.
Chapter 11 Solutions
ADVANCED ACCOUNTING
Ch. 11 - Historically, what factors contributed to the...Ch. 11 - Nestl S.A. is a very large company headquartered...Ch. 11 - Prob. 3QCh. 11 - Prob. 4QCh. 11 - Prob. 5QCh. 11 - In general terms, how does IFRS for SMEs differ...Ch. 11 - Prob. 7QCh. 11 - What are three countries that do not allow...Ch. 11 - Prob. 9QCh. 11 - Prob. 10Q
Ch. 11 - Prob. 11QCh. 11 - What are the two extreme approaches that a company...Ch. 11 - Prob. 13QCh. 11 - Prob. 14QCh. 11 - Prob. 15QCh. 11 - Prob. 16QCh. 11 - Prob. 17QCh. 11 - Prob. 18QCh. 11 - Prob. 19QCh. 11 - Even if all companies in the world were to use...Ch. 11 - Prob. 1PCh. 11 - Prob. 2PCh. 11 - Which of the following is not a reason for...Ch. 11 - Prob. 4PCh. 11 - Prob. 5PCh. 11 - Prob. 6PCh. 11 - Prob. 7PCh. 11 - Prob. 8PCh. 11 - Prob. 9PCh. 11 - Prob. 10PCh. 11 - Prob. 11PCh. 11 - Prob. 12PCh. 11 - Which of the following statements is true for a...Ch. 11 - Prob. 14PCh. 11 - Prob. 15PCh. 11 - Prob. 16PCh. 11 - Prob. 17PCh. 11 - Prob. 18PCh. 11 - Prob. 19PCh. 11 - Prob. 20PCh. 11 - Prob. 21PCh. 11 - Prob. 22PCh. 11 - Prob. 23PCh. 11 - Prob. 24PCh. 11 - Prob. 25PCh. 11 - Prob. 26PCh. 11 - Parnell Company acquired construction equipment on...Ch. 11 - Prob. 28PCh. 11 - Prob. 29PCh. 11 - Hirsch Company acquired equipment at the beginning...
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