f. On July 1, 2021, Erwin paid bondholders P1,200,000 to retire its bonds payable with a carrying amount of P950,000. How much should be reported as income from continuing operations before income taxes for the year ended Dec. 31, 2021? a. P1,690,000 b. P1,290,000 c. P1,115,000 d. P1,015,000
You are preparing the income statement of Mark Company for the year ended Dec. 31, 2021. You determine that company's income from continuing operations before income taxes is P2,400,000. At this point, you are considering the proper treatment of the items listed below. Unless otherwise indicated, assume that none of the items listed are included in the P2,400,000 income figure.
a. Because of changes in technology, inventory costing P100,000 was written off as obsolete in 2021. The company had never recorded this type of loss before.
b. An unusual earthquake damaged the company's plant on Jan. 10, 2022 resulting in a loss to Erwin of P400,000.
c. A loss of P360,000 was sustained on April 5, 2021 as a result of typhoon damage to the company's warehouse in Davao. Typhoons rarely occur in that area.
d. Prior to 2021, Erwin used an accelerated
e. In 2020, Erwin changed its method of accounting for inventory from direct costing, which was used in previous years, to absorption costing. The 2021 ending inventory has been recorded on the absorption cost basis, but no adjustment has been made to beginning inventory, which has a total cost of P2,300,000, made u p o f P1,400,000 direct materials and P900,000 direct labor. The manufacturing
f. On July 1, 2021, Erwin paid bondholders P1,200,000 to retire its bonds payable with a carrying amount of P950,000.
How much should be reported as income from continuing operations before income taxes for the year ended Dec. 31, 2021?
a. P1,690,000
b. P1,290,000
c. P1,115,000
d. P1,015,000
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