Problem 3-15 (IFRS) The end of reporting period of Norway Company is December 31, 2021 and the financial statements for 2021 are authorized for issue on March 15, 2022. On December 31, 2021, Norway Company had a receivable of P400,000 from a customer that is due 60 days after the end of reporting period. On January 15, 2022, a receiver was appointed for the said customer. The receiver informed Norway that the P400,000 would be paid in full by December 31, 2022. Norway Company had equity investments held for trading.. On December 31, 2021, these investments were recorded at the fair value of P5,000,000. During the period up to Fébruary 15, 2022, there was a steady decline in the fair value of all the shares in the portfolio, and on February 15, 2022, the fair value had fallen to P2,000,000. Norway Company had reported a contingent liability on December 31, 2021 related to a court case in which Norway Company was the defendant. The case was not heard until the first week of February 2022. On February 15, 2022, the judge handed down a decision against Norway Company. The judge determined that Norway Company was liable to pay damages totaling P3,000,000. On December 31, 2021, Norway Company had a receivable from a large customer in the amount of P3,500,000. On January 31, 2022, Norway Company was advised in writing by the liquidator of the said customer that the customer was insolvent and that only 10% of the receivable will be paid on April 30, 2022. What total amount should be reported as adjusting events on December 31, 2021? a. 6,150,000 b. 9,150,000 c. 9,550,000 d. 6,500,000 111

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Chapter1: Financial Statements And Business Decisions
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Problem 3-15 (IFRS)
The end of reporting period of Norway Company is December
31, 2021 and the financial statements for 2021 are authorized
for issue on March 15, 2022.
On December 31, 2021, Norway Company had a receivable
of P400,000 from a customer that is due 60 days after the
end of reporting period.
On January 15, 2022, a receiver was appointed for the
said customer. The receiver informed Norway that the
P400,000 would be paid in full by December 31, 2022.
Norway Company had equity investments held for
trading.. On December 31, 2021, these investments were
recorded at the fair value of P5,000,000.
During the period up to Fébruary 15, 2022, there was a
steady decline in the fair value of all the shares in the
portfolio, and on February 15, 2022, the fair value had
fallen to P2,000,000.
Norway Company had reported a contingent liability on
December 31, 2021 related to a court case in which
Norway Company was the defendant. The case was not
heard until the first week of February 2022.
On February 15, 2022, the judge handed down a decision
against Norway Company. The judge determined that
Norway Company was liable to pay damages totaling
P3,000,000.
On December 31, 2021, Norway Company had a receivable
from a large customer in the amount of P3,500,000.
On January 31, 2022, Norway Company was advised in
writing by the liquidator of the said customer that the
customer was insolvent and that only 10% of the
receivable will be paid on April 30, 2022.
What total amount should be reported as adjusting events
on December 31, 2021?
a. 6,150,000
b. 9,150,000
c. 9,550,000
d. 6,500,000
111
Transcribed Image Text:Problem 3-15 (IFRS) The end of reporting period of Norway Company is December 31, 2021 and the financial statements for 2021 are authorized for issue on March 15, 2022. On December 31, 2021, Norway Company had a receivable of P400,000 from a customer that is due 60 days after the end of reporting period. On January 15, 2022, a receiver was appointed for the said customer. The receiver informed Norway that the P400,000 would be paid in full by December 31, 2022. Norway Company had equity investments held for trading.. On December 31, 2021, these investments were recorded at the fair value of P5,000,000. During the period up to Fébruary 15, 2022, there was a steady decline in the fair value of all the shares in the portfolio, and on February 15, 2022, the fair value had fallen to P2,000,000. Norway Company had reported a contingent liability on December 31, 2021 related to a court case in which Norway Company was the defendant. The case was not heard until the first week of February 2022. On February 15, 2022, the judge handed down a decision against Norway Company. The judge determined that Norway Company was liable to pay damages totaling P3,000,000. On December 31, 2021, Norway Company had a receivable from a large customer in the amount of P3,500,000. On January 31, 2022, Norway Company was advised in writing by the liquidator of the said customer that the customer was insolvent and that only 10% of the receivable will be paid on April 30, 2022. What total amount should be reported as adjusting events on December 31, 2021? a. 6,150,000 b. 9,150,000 c. 9,550,000 d. 6,500,000 111
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