Requirement:Compute for the Adjusted Profit for the year ended December 31, 20x1. 1. An entity reports profit of P1,000,000 for the year endedDecember 31, 20x1. The entity's financial statements areauthorized for issue on April 3, 20x2. The following eventstake place after December 31, 20x1:On February 1, 20x2, a debtor files for bankruptcy. Theentity has an outstanding loan receivable of P100,000 froma.the debtor.b. On March 1, 20x2, a flood damaged the entity's facilities.The entity estimates the cost of damages to be P450,000.On March 28, 20x2, the entity sells inventory for P100,000.с.The inventory has a cost of P140,000 and net realizablevalue of P120,000 on December 31, 20x1. The entityrecognized an inventory write-down of P20,000 onDecember 31, 20x1.d. On April 1, 20x2, the entity reissues treasury sharesoriginally acquired at a total cost of P200,000 for P260,000.

The entity has ended its year on 31st Dec 20x1. Now there are few events which are occurring between…

Answered: Compute for the Adjusted Profit for the…

Business

Accounting

Compute for the Adjusted Profit for the year ended December 31, 20x1.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Requirement:

Compute for the Adjusted Profit for the year ended December 31, 20x1.

1. An entity reports profit of P1,000,000 for the year ended
December 31, 20x1. The entity's financial statements are
authorized for issue on April 3, 20x2. The following events
take place after December 31, 20x1:
On February 1, 20x2, a debtor files for bankruptcy. The
entity has an outstanding loan receivable of P100,000 from
a.
the debtor.
b. On March 1, 20x2, a flood damaged the entity's facilities.
The entity estimates the cost of damages to be P450,000.
On March 28, 20x2, the entity sells inventory for P100,000.
с.
The inventory has a cost of P140,000 and net realizable
value of P120,000 on December 31, 20x1. The entity
recognized an inventory write-down of P20,000 on
December 31, 20x1.
d. On April 1, 20x2, the entity reissues treasury shares
originally acquired at a total cost of P200,000 for P260,000.

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