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Determine the following as a result of your audit: 3. How much is the amount of liability for income tax that should be reported in its December 31, 2021 statement of financial position? 4. How much is the amount of "trade and other payables" that should be presented on the face of its December 31, 2021 statement of financial position?

Determine the following as a result of your audit: 3. How much is the amount of liability for income tax that should be reported in its December 31, 2021 statement of financial position? 4. How much is the amount of "trade and other payables" that should be presented on the face of its December 31, 2021 statement of financial position?

FINANCIAL ACCOUNTING
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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d. The debit balance on suppliers account represents excess payment of an invoice dated December 1, 2021. The payment of invoice was made with the discount period. The 100,000 debit balance is the supposedly the amount of discount availed. Note 3: Accrued payroll Based on your inquiry and inspection of related documents, the above balance of accrued payroll represents the net balance of the salaries of the employees who worked for the period covered December 15 - 31, 2021. Total deduction includes amount withheld for SSS, Philhealth, Pag-Ibig, 41,000 and employee taxes 25,000. Note 4: Liability for bonuses and profit sharing The board of directors of Lavender authorized the bonus of key management personnel as an additional benefit. The bonus is 15% of the 3,400,000 adjusted net income after bonus but before 30% tax. Note 5: Liability for income taxes On January 5, 2022, the BIR assessed Lavender an additional income tax of 300,000 for the 2020 taxable year. Company's attorney and tax accountants have stated that the BIR will agree to a 100,000 settlement but the company has contested the matter with the BIR and no decision was released as of the date for authorized of issue of the financial statement. The financial statement of Lavender was authorized for issuance on March 30, 2022. Determine the following as a result of your audit: 3. How much is the amount of liability for income tax that should be reported in its December 31, 2021 statement of financial position? 4. How much is the amount of "trade and other payables" that should be presented on the face of its December 31, 2021 statement of financial position?
Transcribed Image Text:d. The debit balance on suppliers account represents excess payment of an invoice dated December 1, 2021. The payment of invoice was made with the discount period. The 100,000 debit balance is the supposedly the amount of discount availed. Note 3: Accrued payroll Based on your inquiry and inspection of related documents, the above balance of accrued payroll represents the net balance of the salaries of the employees who worked for the period covered December 15 - 31, 2021. Total deduction includes amount withheld for SSS, Philhealth, Pag-Ibig, 41,000 and employee taxes 25,000. Note 4: Liability for bonuses and profit sharing The board of directors of Lavender authorized the bonus of key management personnel as an additional benefit. The bonus is 15% of the 3,400,000 adjusted net income after bonus but before 30% tax. Note 5: Liability for income taxes On January 5, 2022, the BIR assessed Lavender an additional income tax of 300,000 for the 2020 taxable year. Company's attorney and tax accountants have stated that the BIR will agree to a 100,000 settlement but the company has contested the matter with the BIR and no decision was released as of the date for authorized of issue of the financial statement. The financial statement of Lavender was authorized for issuance on March 30, 2022. Determine the following as a result of your audit: 3. How much is the amount of liability for income tax that should be reported in its December 31, 2021 statement of financial position? 4. How much is the amount of "trade and other payables" that should be presented on the face of its December 31, 2021 statement of financial position?
Lavender Company had the following information related to its current liabilities for the year ended, December 31, 2021. The results of your inquiry and observation were summarized below: Notes Payable arising from 3 year bank loans, on which a securities valued at 1,000,000 have been pledge as security, due on December 31, 2022. (Note 1) Accounts payable, net of debit balances of P100,000 (Note 2) Accrued Payroll (Note 3) PhilHealth, and PAG-IBIG payable SSS payable Employee income tax withheld Bonus and profit sharing payable (Note 4) Liability for income taxes (Note 5) Cash dividends payable Share dividend payable Dividend in arrears on preference shares Estimated liability for damages 800,000 3,160,000 240,000 25,000 16,000 25,000 ? 300,000 120,000 150,000 200,000 130,000 The following audit notes were summarized by the audit staff: Note 1: Notes payable arising from bank loans The notes payable from bank loan is dated December 31, 2019 due on December 31, 2022 with annual interest rate of 12%. Interest is payable every December 31 of each уear. Note 2: Accounts payable The unpaid voucher file included in the following items that had been recorded as of December 31, 2021: a. From Bamboo Company - 240,000 merchandise shipped on December 31, 2021, FOB shipping point; received on January 3, 2022. b. B. From Lockwood, Inc. - 210,000 merchandise shipped on December 26, 2021, FOB destination; received on January 6, 2022 c. On December 27, 2021, a supplier authorized Lavender to return goods billed at 300,000 which were shipped on December 30, 2021, but the result of inspection revealed that the 300,000 credit memo was not received until January 6, 2022, where it is recorded.
Transcribed Image Text:Lavender Company had the following information related to its current liabilities for the year ended, December 31, 2021. The results of your inquiry and observation were summarized below: Notes Payable arising from 3 year bank loans, on which a securities valued at 1,000,000 have been pledge as security, due on December 31, 2022. (Note 1) Accounts payable, net of debit balances of P100,000 (Note 2) Accrued Payroll (Note 3) PhilHealth, and PAG-IBIG payable SSS payable Employee income tax withheld Bonus and profit sharing payable (Note 4) Liability for income taxes (Note 5) Cash dividends payable Share dividend payable Dividend in arrears on preference shares Estimated liability for damages 800,000 3,160,000 240,000 25,000 16,000 25,000 ? 300,000 120,000 150,000 200,000 130,000 The following audit notes were summarized by the audit staff: Note 1: Notes payable arising from bank loans The notes payable from bank loan is dated December 31, 2019 due on December 31, 2022 with annual interest rate of 12%. Interest is payable every December 31 of each уear. Note 2: Accounts payable The unpaid voucher file included in the following items that had been recorded as of December 31, 2021: a. From Bamboo Company - 240,000 merchandise shipped on December 31, 2021, FOB shipping point; received on January 3, 2022. b. B. From Lockwood, Inc. - 210,000 merchandise shipped on December 26, 2021, FOB destination; received on January 6, 2022 c. On December 27, 2021, a supplier authorized Lavender to return goods billed at 300,000 which were shipped on December 30, 2021, but the result of inspection revealed that the 300,000 credit memo was not received until January 6, 2022, where it is recorded.
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