3. Laura Company carried a provision of P2,000,000 in the draft financial statements on December 31, 2021 in relation to an unresolved court case. On January 31, 2022, when the financial statements on December 31, 2021 had not yet been authorized for issue, the case was settled and the court decided the final total damages payable by Aurora to be P2,800,000. What amount should be adjusted on December 31, 2021 in relation to this event? g. increase in asset of P800,000 b. increase in liability of P500,000 c. increase in asset of 500,000 d. increase in liability of P800,000
3. Laura Company carried a provision of P2,000,000 in the draft financial statements on December 31, 2021 in relation to an unresolved court case. On January 31, 2022, when the financial statements on December 31, 2021 had not yet been authorized for issue, the case was settled and the court decided the final total damages payable by Aurora to be P2,800,000. What amount should be adjusted on December 31, 2021 in relation to this event? g. increase in asset of P800,000 b. increase in liability of P500,000 c. increase in asset of 500,000 d. increase in liability of P800,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:3. Laura Company carried a provision of P2,000,000 in the draft financial statements
on December 31, 2021 in relation to an unresolved court case. On January 31, 2022,
when the financial statements on December 31, 2021 had not yet been authorized for
issue, the case was settled and the court decided the final total damages payable by
Aurora to be P2,800,000. What amount should be adjusted on December 31, 2021 in
relation to this event?
g. increase in asset of P800,000
b. increase in liability of P500,000
c. increase in asset of 500,000
d. increase in liability of P800,000
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