Requirement:Compute for the Adjusted Profit for the year ended December 31, 20x1. a. On January 18, 20x2, the entity receives from anotherentity a letter of guarantee amounting to P800,000 inconjunction with the entity's bank loan application. Theloan proceeds were received on January 22, 20x2.b. On February 1, 20x2, a P1,000,000 lawsuit was filed againstthe entity for a malfunctioning product which was sold toa customer on December 28, 20x1. The entity's legalcounsel believes that it is reasonably possible that theywill lose the case.On February 14, 20x2, a debtor who owes the entityP500,000 filed for bankruptcy.d. On February 28, 20x2, a building with carrying amount ofP1,800,000 on December 31, 20x1 was totally razed by fire.The. entity filed for an insurance claim amounting toP1,600,000 on March 1, 20x1. The entity believes it isprobable that the insurance claim will be approved.с.Requirement: Compute for the adjusted profit for the year endedDecember 31, 20x1. 2. An entity reports profit of P2,000,000 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:

Here asked about the various situation which are reflecting the ending balance of the net profit…

d. On February 28, 20x2, a building with carrying amount of P1,800,000 on December 31, 20x1 was totally razed by fire. The. entity filed for an insurance claim amounting to P1,600,000 on March 1, 20x1. The entity believes it is probable that the insurance claim will be approved. Requirement: Compute for the adjusted profit for the year ended December 31, 20x1.

d. On February 28, 20x2, a building with carrying amount of P1,800,000 on December 31, 20x1 was totally razed by fire. The. entity filed for an insurance claim amounting to P1,600,000 on March 1, 20x1. The entity believes it is probable that the insurance claim will be approved. Requirement: 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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