accounting treatments
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Sid Berhad year end is 31 December 2020. The accountant of Sid Berhad has asked for your opinion on the accounting treatment of the following items:
(iii) During the year, Sid Bhd received a claim for RM1 million from one of its workers, Daniel. Daniel is now paralysed with head injuries after metal scaffolding that was under construction collapsed at building site. The insurance company refused to meet the claim on the ground that Daniel was found not wearing a protective helmet at the time of accident. In the opinion of Sid’s legal advisor, the company would have to settle the claim between RM100,000 to RM400,000, depending on whether the paralysis is temporary or permanent. The medical opinion is that there is a 20% chance that the paralysis will be permanent.
Required:
Advise Sid Berhad’s accountant on the accounting treatments for all the above- mentioned items. Your answer shall make reference to relevant MFRS Standards.
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- The following information are available: 1. Cate did not bill yet the client for legal services rendered on December 28. On December 29, they won the case and billed the client on January 8, 2022 amounting to 74,780 2. Cate received 52,000 for the services that are yet to be performed on January 2022 to May 2022. 60% will allocate to legal and remaining to accounting. Cate did not record this transaction to her books. 3. A cafeteria is behind on space rental revenue, and this 10,000 of accrued revenues was unrecorded at the time the trial balance was prepared. 4. 34,840 of Unearned Rent account balance was still unearned at year-end 5. Computers and Equipment was bought on January 1, 2019 with 3,600 salvage value and estimated useful life of 6 years. Cate did not record yet any adjustments for 2021. 6. Building are being depreciated starting 2017 with 25,000 salvage value and estimated useful life of 40 years. Cate did not record yet any adjustments for 2021. 7. Actual…In 2019, A.M.E. Corporation's accountant incorrectly expensed the cost of a major repairs to one of its equipment. The repairs would prolong the life of the asset beyond its current estimated useful life. Which of the following is (are) true? Question 18 options: Income in 2019 is understated. Income in future years is overstated. Corporation's assets in 2019 will be understated. All of these answer choices are trueFinley Roofing is involved with several situations that possibly involve contingencies. Each is described below. Finley's fiscal year ends December 31, and the 2023 financial statements are issued on March 20, 2024. 1. Finley is involved in a lawsuit resulting from a dispute with a customer. On January 25, 2023, judgment was rendered against Finley in the amount of $10 million plus interest, a total of $11 million. Finley plans to appeal the judgment, but does not expect the appeal to succeed. 2. At March 20, 2023, the EPA is in the process of investigating possible environmental violations at one of Finley's work sites, but has not proposed a deficiency assessment. Management feels an assessment is probable, and if an assessment is made an unfavorable settlement between $15 million to $23 million is probable. 3. Finley is the plaintiff in a $41 million lawsuit filed against AA Asphalt for damages due to lost profits from rejected contracts and for unpaid receivables. The case is in…
- Keka completed the following transactions in the year to December 31, 2021:Transaction 1: Sold a car for P1,200 to the uncle of Keka 's finance director.Transaction 2: Sold goods to the value of P1,400 to Serene, a company owned by the daughter of Keka 's managing director. Serene has no other connection with Keka.Which transactions, if any, require disclosure in the financial statements of Keka under PAS 24 Related Party Disclosures?Perkasa Catering Sdn Bhd entered into a business agreement with Teguh Canopy Sdn Bhd in January 2020. Raduan was the major shareholder of Perkasa Catering Sdn Bhd. Raduan had paid up all his share capital. He was also appointed as the company's director. Recently due to the pandemic crisis, Perkasa Catering Sdn Bhd went into difficulties and was wound up by the court order. Perkasa Catering Sdn Bhd still owes RM 300,000 to Teguh Canopy Sdn Bhd. Since Perkasa Catering Sdn Bhd has been wound up, Teguh Canopy Sdn Bhd wishes to initiate a legal proceeding against Raduan to recover the sum of RM 300,000 by virtue of he was the major shareholder and director of the company. Advise Raduan.Skip rented an office building to Chris for $1,000 per month. On December 29, 2018, Skip received a deposit of $7,000 in addition to the first and last months' rent. Occupancy began on January 2, 2019. On July 15, 2019, Chrisclosed his business and filed for bankruptcy. Skip had collected rent for February, March, and April on the first of each month. Skip had received May rent on May 10, but collected no payments afterwards. Skip withheld $1,000 from the deposit because of damage to the property and $500 for unpaid rent. He refunded the balance of the deposit to Chris. Requirement What amount would Skip report as gross income for2018? for 2019? Begin by selecting the labels to show the items that will comprise Skip's 2018 gross income, and then enter the amounts to compute the 2018 gross income amount. (If an input field is not used, leave the input field(s) empty; do not select a label or enter a zero.) Taxable item 2018 Gross income…
- On November 1, 2021, a fire totally destroyed the building of ABC Company. The building cost of P2,000,000 and a carrying amount of P1,200,000 as of the date of the fire. A P1,000 claim was filed on November 15, 2021. On January 5, 2022, after due investigation, it was ABC is free of negligence and the insurance company agreed to pay ABC the P1,000,000 in 9. Prepare the entry on November 1, 2021, to record the impairment of the building. 10. Prepare the entry on January 5, 2022, to record the insurance claim.The following information are available: 1. Cate did not bill yet the client for legal services rendered on December 28. On December 29, they won the case and billed the client on January 8, 2022 amounting to 74,780 2. Cate received 52,000 for the services that are yet to be performed on January 2022 to May 2022. 60% will allocate to legal and remaining to accounting. Cate did not record this transaction to her books. 3. A cafeteria is behind on space rental revenue, and this 10,000 of accrued revenues was unrecorded at the time the trial balance was prepared. 4. 34,840 of Unearned Rent account balance was still unearned at year-end 5. Computers and Equipment was bought on January 1, 2019 with 3,600 salvage value and estimated useful life of 6 years. Cate did not record yet any adjustments for 2021. 6. Building are being depreciated starting 2017 with 25,000 salvage value and estimated useful life of 40 years. Cate did not record yet any adjustments for 2021. 7. Actual drawing shows…Faramarzinikpey Company, a public company, is preparing its annual financial statements on December 31, 2022. The following selected information is available: The company has been sued by an employee for discrimination. The employee is seeking $5,000,000 in damages. Legal counsel believes it is unlikely that the company will have to pay any damages. The amount is material ( substantial ) to the company. Employees have accrued ( earned ) $4,200 in vacation pay benefits as of December 31,2022. The company has been sued in a $ 3,000,000 product liability lawsuit. Legal counsel believes the company will probably have to pay the full amount. On October 1, 2022, the company signed a $ 10,000, 6-month, 8% note payable. No interest has been accrued to date. Instructions: Prepare any necessary adjusting entries or disclosures on December 31, 2022.
- 2. On November 5, 2021, a DEF Corporation's truck was in an accident with an auto driven by Mr. Dela Cruz. DEF received notice on January 12, 2022 of a lawsuit for P700,000 damages for personal injuries suffered by Mr. Dela Cruz. DEF Corporation's counsel believes it is probable that Mr. Dela Cruz will be awarded an estimated amount in the range between P200,000 and P450,000, and that P300,000 is a better estimate of potential liability than any other amount. DEF's accounting period ends on December 31, and the 2021 financial statements were issued on March 2, 2022. What amount of loss should DEF accrue at December 31, 2021?West Chester University is being sued for $1,000,000 by Mr. Durstin. Mr. Durstin is claiming he was severely injured on June 21, 2019 when he slipped on the snow and ice that had not been properly shoveled off of the pavement in front of Anderson Hall. As of June 30, 2019, the last day of West Chester University's fiscal year, Mr. Durstin's lawsuit had not yet gone to trial. Which of the following is CORRECT concerning the impact of the contingent liability from Mr. Durstin's lawsuit on West Chester University's June, 30, 2019 financial statements? Multiple Choice Ignore the lawsuit. No impact on the financial statements or Disclosure in the Notes Record the $1,000,000 as a Loss on the 2019 Income Statement Present the $1,00,000 as a Loss on the Income Statement and a Liability on the Balance Sheet; and required Disclosure in the NotesOn January 1, 2021, a Dune Corporation truck was in an accident with an auto driven by R. Bell. Dune received notice on January 12, 2021, of a lawsuit for $700,000 in damages for personal injuries suffered by Bell. Dune Corporation’s legal counsel believes it is probable that Bell will be awarded an estimated amount in the range between $200,000 and $500,000, Dune’s accounting year ends on December 31, and the 2020 financial statements were issued on March 31, 2021. What amount of provision should Dune accrue on December 31, 2020?
