December Norway Company reported that the year-end is ! receivable of P400,000 from a customer that is due 60 2021, a receiver was appointed for the said customer. authorized for 31, 2020 and the financial statements are issue on March 15, 2021. 1. On December 31, 2020, Norway Company haa 15, days after the end of reporting period. On January The receiver informed Norway that the P400,000 be paid in full by June 30, 2021. would 2. Norway Company measured share investments held trading at fair value through profit or loss. On Decembe 31, 2020, these investments were recorded at the marka value of P5,000,000. During the period up to February 15 2021, there was a steady decline in the market value of all the shares in the portfolio, and on February 15, 2021. the market value had fallen to P2,000,000. 3. Norway Company had reported a contingent liability on December 31, 2020 related to a court case in which Norway Company was the defendant. The case was not heard until the first week of February 2021. On March 1, 2021, the judge handed down a decision against Norway Company. The judge determined that Norway Company was liable to pay damages and costs totaling P3,000,000. 4. On December 31, 2020, Norway Company had an account receivable from a large customer in the amount of P3,500,000. On January 31, 2021, Norway Company was advised by the liquidator of the said customer that the customer was insolvent and would be unable to repay the full amount owed to Norway Company. The liquidator advised Norway Company in writing that only 10% of the account receivable will be paid on Ãpril 30, 2021. Required: Prepare adjusting entries on December 31, 2020 to reflect the events after reporting period.
December Norway Company reported that the year-end is ! receivable of P400,000 from a customer that is due 60 2021, a receiver was appointed for the said customer. authorized for 31, 2020 and the financial statements are issue on March 15, 2021. 1. On December 31, 2020, Norway Company haa 15, days after the end of reporting period. On January The receiver informed Norway that the P400,000 be paid in full by June 30, 2021. would 2. Norway Company measured share investments held trading at fair value through profit or loss. On Decembe 31, 2020, these investments were recorded at the marka value of P5,000,000. During the period up to February 15 2021, there was a steady decline in the market value of all the shares in the portfolio, and on February 15, 2021. the market value had fallen to P2,000,000. 3. Norway Company had reported a contingent liability on December 31, 2020 related to a court case in which Norway Company was the defendant. The case was not heard until the first week of February 2021. On March 1, 2021, the judge handed down a decision against Norway Company. The judge determined that Norway Company was liable to pay damages and costs totaling P3,000,000. 4. On December 31, 2020, Norway Company had an account receivable from a large customer in the amount of P3,500,000. On January 31, 2021, Norway Company was advised by the liquidator of the said customer that the customer was insolvent and would be unable to repay the full amount owed to Norway Company. The liquidator advised Norway Company in writing that only 10% of the account receivable will be paid on Ãpril 30, 2021. Required: Prepare adjusting entries on December 31, 2020 to reflect the events after reporting period.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:1. On December 31, 2020, Norway Company had:
2021, a receiver was appointed for the said customer.
Norway Company reported that the year-end is December
The receiver informed Norway that the P400,000 would
days after the end of reporting period. On January 15,
authorized
receivable of P400,000 from a customer that is due 60
31, 2020, these investments were recorded at the market
31, 2020 and the financial statements are
issue on March 15, 2021.
for
be paid in full by June 30, 2021.
2. Norway Company measured share investments held .
trading at fair value through profit or loss. On December
value of P5,000,000. During the period up to February 15
2021, there was a steady decline in the market value of
all the shares in the portfolio, and on February 15, 2021.
the market value had fallen to P2,000,000.
3. Norway Company had reported a contingent liability on
December 31, 2020 related to a court case in which
Norway Company was the defendant. The case was not
heard until the first week of February 2021. On March 1,
2021, the judge handed down a decision against Norway
Company. The judge determined that Norway Company
was liable to pay damages and costs totaling P3,000,000.
4. On December 31, 2020, Norway Company had an account
receivable from a large customer in the amount of
P3,500,000. On January 31, 2021, Norway Company was
advised by the liquidator of the said customer that the
customer was insolvent and would be unable to
the
repay
full amount owed to Norway Company. The liquidator
advised Norway Company in writing that only 10% of the
account receivable will be paid on April 30, 2021.
Required:
Prepare adjusting entries on December 31, 2020 to reflec
the events after reporting period.
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