Chapter 3, Problem 2DYS

2. A review of the company's provision for uncollectible accounts during 2023 resulted in a determination that 1.5% of sales is the appropriate amount of loss on impairment to be charged to operations, rather than the 2% used for the preceding two years. Loss on impairment recognized in 2022 and 2021 was $33,200 and $15,300, respectively. The company would have recorded $18,000 of loss on impairment under the old rate for 2023. No entry has yet been made in 2023 for loss on impairment.

The following information is available for Northwest Enterprises Ltd., for the year ended December 31, 2017. All amounts noted below are before income tax • Operating income from discontinued operations: • Net sales revenue from continuing operations: • Gain on sale of land used in continuing operations: • Loss on disposal of discontinued operations: • Cost of goods sold for continuing operations: • Operating expenses for continuing operations: Loss due to warehouse fire (continuing operations): $80,000 $75,000 $1,400,000 $32,000 $120,000 $850,000 $325,000 On January 1, 2017, Northwest had 100,000 common shares outstanding. Northwest issued 20,000 common shares on April 1, 2017. On September 1, Northwest declared a 3 for 2 stock split. The company has an income tax rate of 20%. Required: Prepare an income statement in good form for Northwest. Include the required earnings per share disclosure.

A company had to pay R15 million in respect of customers’ claims for injuries suffered from goods manufactured and sold in the previous year. When preparing the financial statements for the previous year the company was not aware of it nor did they provide for these damages. How should the company report the amount paid? In the current year’s Statement of income, describing it as an extraordinary item or On the Statement of financial position as a deduction from the total of Equity and reserves or In the Statement of changes in equity as a deduction from balance brought forward or In the current year’s Statement of income, included as part of Administration Expenses.

Company XYZ manufactures a tangible product and sells the product at wholesale. In its first year of operations, XYZ manufactured 1,900 units of product and incurred $351,500 direct material cost and $194,750 direct labor costs. For financial statement purposes, XYZ capitalized $149,750 indirect costs to inventory. For tax purposes, it had to capitalize $180,750 indirect costs to inventory under the UNICAP rules. At the end of its first year, XYZ held 190 units in inventory. In its second year of operations, XYZ manufactured 3,800 units of product and incurred $722,000 direct material cost and $418,000 direct labor costs. For financial statement purposes, XYZ capitalized $282,000 indirect costs to inventory. For tax purposes, it had to capitalize $336,000 indirect costs to inventory under the UNICAP rules. At the end of its second year, XYZ held 380 items in inventory. Required: a. Compute XYZ's cost of goods sold for book purposes and for tax purposes for second year assuming that XYZ…

lab Company’s accounting policy with respect to investment properties is to measure them at fair value at the end of each reporting period. One of its investment properties was measured at P8,000,000 on December 31, 2020.The property had been acquired on January 1, 2020 for a total of P7,600,000, made up of P6,900,000 paid to the vendor. P300,000 paid to the local authority as a property transfer tax and P400,000 paid to professional advisers. The useful life of the property is 40 years. What is the gain to be recognized in profit or loss for the year ended December 31, 2020 in respect of the investment property? *   P400,000 P590,000 P700,000 P800,000 answer not given

An annual report of Costco Wholesale Corporation, the large discount company, contained the following statement:“The Company periodically evaluates long-lived assets for impairment when circumstances occur that may indicate the carrying amount of the asset group may not be fully recoverable”. Why would the concept of impairment be referred to as a conservative accounting approach?

Chicken Wings Inc. incurred the following expenditures relating to its biological assets during the current year:Commissions to brokers, P5,500; Transportation costs to the market, P3,850; Levies by commodity exchange, P1,650; Transfer taxes and duties, P2,750; Advertising costs, P1,100What total amount shall be classified as costs to sell in accordance with IAS 41 Agriculture?

Staton Corporation's balance sheet includes Equipment recorded at a cost of $110,000 and accumulated depreciation of 20,000. After performing its annual review for impairment, Staton determined the following: Asset value in use $69,000 Fair value less selling costs 67,000 Undiscounted cash flows... 89,000 a Assuming Staton uses the rational entity impairment model record the appropriate entries. b Assuming Staton uses the cost recovery model calculate the impairment if any.

Mercy Company has correctly classified the fuel and oil division as discontinued operation. For the year ended December 31, 2022, the disposal group incurred trading loss before tax of P2,000,000 and the loss on remeasuring it to fair value less cost of disposal was P1,500,000. The income tax rate is 30%. What amount should be reported as loss from discontinued operation for 2022?