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Gringo Company is completing the preparation of the financial statements for the year ended December 31, 2022. The financial statements are authorized for issue on March 31, 2023: On March 15, 2023, a dividend of P3,000,000 was declared and a contractual profit share payment of P1,000,000 was made based on the profit for the year ended December 31, 2022. On February 1, 2023, a customer went into liquidation having owed the entity P500,000 for the past 5 months. No allowance had been made against this account in the financial statements. On March 20, 2023, a manufacturing plant was destroyed by fire resulting in a financial loss of P2,500,000. What total amount should be recognized in profit or loss for 2022 to reflect adjusting events after the end of reporting period? P4,000,000 B P3,000,000 C) P2,500,000 P1,500,000

Gringo Company is completing the preparation of the financial statements for the year ended December 31, 2022. The financial statements are authorized for issue on March 31, 2023: On March 15, 2023, a dividend of P3,000,000 was declared and a contractual profit share payment of P1,000,000 was made based on the profit for the year ended December 31, 2022. On February 1, 2023, a customer went into liquidation having owed the entity P500,000 for the past 5 months. No allowance had been made against this account in the financial statements. On March 20, 2023, a manufacturing plant was destroyed by fire resulting in a financial loss of P2,500,000. What total amount should be recognized in profit or loss for 2022 to reflect adjusting events after the end of reporting period? P4,000,000 B P3,000,000 C) P2,500,000 P1,500,000

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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Question 18 Gringo Company is completing the preparation of the financial statements for the year ended December 31, 2022. The financial statements are authorized for issue on March 31, 2023: On March 15, 2023, a dividend of P3,000,000 was declared and a contractual profit share payment of P1,000,000 was made based on the profit for the year ended December 31, 2022. On February 1, 2023, a customer went into liquidation having owed the entity P500,000 for the past 5 months. No allowance had been made against this account in the financial statements. On March 20, 2023, a manufacturing plant was destroyed by fire resulting in a financial loss of P2,500,000. What total amount should be recognized in profit or loss for 2022 to reflect adjusting events after the end of reporting period? (A) P4,000,000 B P3,000,000 C) P2,500,000 D P1,500,000 Question 19 Wendy Company reported the following events during 2022: The entity decided to write-off P1,000,000 from inventory which was over two years old as it was obsolete. Sales of P1,500,000 had been omitted from the financial statements for the year ended December 31, 2021. What pretax amount should be reported as prior period error in the financial statements for 2022? A P2,500,000 B P1,500,000 P1,000,0000 PO
Transcribed Image Text:Question 18 Gringo Company is completing the preparation of the financial statements for the year ended December 31, 2022. The financial statements are authorized for issue on March 31, 2023: On March 15, 2023, a dividend of P3,000,000 was declared and a contractual profit share payment of P1,000,000 was made based on the profit for the year ended December 31, 2022. On February 1, 2023, a customer went into liquidation having owed the entity P500,000 for the past 5 months. No allowance had been made against this account in the financial statements. On March 20, 2023, a manufacturing plant was destroyed by fire resulting in a financial loss of P2,500,000. What total amount should be recognized in profit or loss for 2022 to reflect adjusting events after the end of reporting period? (A) P4,000,000 B P3,000,000 C) P2,500,000 D P1,500,000 Question 19 Wendy Company reported the following events during 2022: The entity decided to write-off P1,000,000 from inventory which was over two years old as it was obsolete. Sales of P1,500,000 had been omitted from the financial statements for the year ended December 31, 2021. What pretax amount should be reported as prior period error in the financial statements for 2022? A P2,500,000 B P1,500,000 P1,000,0000 PO
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