8. The Clarity, Inc. has determined its 2018 profit to be P5,000,000. In an initialaudit of the company's financial statements, you determined the following:Revenue received in advance in 2018 of P250,000 was credited to a revenueaccount when received. Of the total, P50,000 was earned in 2018, P120,000will be earned in 2019, and the remainder will be earned in 2020. Noadjustment was made at the end of 2018.P150,000 unrealized loss on FVPL (financial assets at fair value through profitor loss) in 2018 was erroneously debited to other comprehensive incomeaccount.What is the corrected profit for the year 2018?A. P4,600,000.B. P4,650,000.C. P4,850,000.D. P4,930,000.

Unearned Revenue represents the amount of advances received from the customers on the account of…

Answered: corrected profit

Business

Accounting

corrected profit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: RUE OR FALSE Net income under GAAP highlights differences between variable and fixed costs.

A: Answer: Net income under GAAP highlights differences between variable and fixed costs. The…

Q: period cost shown in statement of financial position Ture or false

A: Period cost refers to the cost related to the passage of time. Since it is associated with the…

Q: Compare variable and fixed expenses.

A: Variable expenses are the expenses which change proportionately with a change in the activity…

Q: When should a company recognize revenue under GAAP? Multiple Choice When the promised performance…

A: According to generally accepted accounting principles (GAAP), the following two criteria must be…

Q: DAILY REVENUE AND COST

A: The daily revenue is the revenue which has been earned by the company or any business during the day…

Q: Cost recovery can be .18 related to capital maintenance

A: Cost recovery can be related to capital maintenance. Because both cost recovery and capital…

Q: a. Calculate the return on investment. (Round your answer to 2 decimal places.) Return on Investment…

A: Return on Investment: It is a measure of performance and profitability that is applied to evaluate…

Q: Calculation of profit change from changes in sales price, sales volume, variable costs, or fixed…

A: This question deals with profit change from changes in sales price, sales volume, variable costs, or…

Q: Define increase or decrease of credits.

A: Definition: Account: Account is the basic record that reports all changes in the value of…

Q: Profit volume ratio is used for the calculation of: Select one: O a. Profit at given sales O b.…

A: The profit volume ratio is also known as contribution margin ratio.

Q: (Profit) What is the impact of decreasing/increasing radius kettle (m) with regarding to heat time?…

A: Just as radius kettle (m) and heat time are correlated so is profits being earned or generated by a…

Q: Explain price improvement

A: It is a process where the purchasing customer gets the opportunity to buy shares at a lower cost…

Q: How is Gross Margin % calculated?

Q: 9. The point where the sales line and the total expense line intersects represents the A. profit…

A: Sales line: Sales line represents the sales incurred by the company over the specific period.…

Q: Contribution margin per unit contributes to covering ____cost and then generating. variable, profit…

A: The contribution margin is calculated as difference between sales and variable costs. The net…

Q: The is the amount remaining from sales revenue after all variable expenses have been deducted a.…

A: Sale revenue is the amount of revenue earned by the entity by selling goods in the market. It is…

Q: Compare standard quantity discounts to cumulative quantity discounts.

A: Cumulative Quantities Discount (CQD) is a system intended to recompense consumers after a definite…

Q: What is the difference between g Operating Margin and Net Margin?

Q: Payback Period Modified Payback Period Net Present Value Profitability Index Accounting Rate of…

A: Here, we have to find these financial topics.

Q: Contribution margin is equal to a. Sales - Fixed expenses b. Sales - Selling expenses…

A: Contribution margin refers to the amount of sales revenue left after deducting variable cost.

Q: Malmo, Inc. manufactures travel locks. The budgeted selling price is $12 per lock, the variable cost…

A: Flexible budget means expected income and expenditure in future to find out budgeted income.…

Q: 3. The sales level at which operating income is zero. Drop in sales a company can absorb without…

A: Break even analysis involves determination of sales level at which the firm's total revenue equals…

Q: What is the gross profit declined due to increase in cost in the amount?

A: Gross profit refers to the profit calculated after considering the costs associated with the…

Q: A changes in direct proportion to changes in the cost-driver level * mixed costs O fixed costs O…

A: If the change in cost and change cost driver level is of direct proportion, it is not fixed cost or…

Q: Operating leverage measures the: 1. Change in profit when sales changes 2. change in contrribution…

A: Leverage is another way to refer to debt. In business, Leverage often refers to borrowing funds to…

Q: Merits and demerits of the cost value profit analysis CVP

A: Lets understand the basics. Cost volume profit analysis (CVP) is as name suggest analysis of total…

Q: iable costs change in direct proportion to a change in the activity level. True or False?

A: There are two types of one is fixed cost and other is variable cost and both are part of the total…

Q: How is A/R Turnover calculated?

A: Accounts receivable: Accounts receivable refers to the amount to be received within a short…

Q: Define the term Annual operating cost:?

A: MEANING OF OPERATING COST The sum total of operating expenses and cost of goods sold is called…

Q: The “plus” in cost-plus pricing is often referred to as Markup. Extra profit. Gross profit.…

A: Cost plus pricing means when selling price is fixed as a addition of profit on the cost price. For…

Question

8. The Clarity, Inc. has determined its 2018 profit to be P5,000,000. In an initial
audit of the company's financial statements, you determined the following:
Revenue received in advance in 2018 of P250,000 was credited to a revenue
account when received. Of the total, P50,000 was earned in 2018, P120,000
will be earned in 2019, and the remainder will be earned in 2020. No
adjustment was made at the end of 2018.
P150,000 unrealized loss on FVPL (financial assets at fair value through profit
or loss) in 2018 was erroneously debited to other comprehensive income
account.
What is the corrected profit for the year 2018?
A. P4,600,000.
B. P4,650,000.
C. P4,850,000.
D. P4,930,000.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Describe the earned value management terms.
What is the gross profit margin? Higher ratio or lower ratio
what is margin of safety as a percentage of sales
How can we apply Annual-Worth Analysis for the calculation of Unit-Profit or Unit-Cost Calculation?
Subject:- Accounting
In cost-volume-profit analysis, what is the estimated profit at the break-even point?
Change in operating income = change in sales dollars x contribution margin What is the equation for the "change in sales dollars"?
Operating leverage measures the: O Change in profit when sales changes. O Change in Contibution when sales changes. O Change in BEP when fixed cost changes. O Change in BEP when sales changes.
How change in activity(sale) affect the contribution margin and net operating income?
Increasing variable cost while decreasing fixed cost