How much is..... 1. Realized holding gain 2. Unrealized holding gain 3. Net income 4.Total noncurrent assets 5. Total liabilities and shareholders' equity
How much is..... 1. Realized holding gain 2. Unrealized holding gain 3. Net income 4.Total noncurrent assets 5. Total liabilities and shareholders' equity
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
How much is.....
1. Realized holding gain
2. Unrealized holding gain
3. Net income
4.Total noncurrent assets
5. Total liabilities and shareholders' equity
![Problem 2: ABC Company was formed on January 1, 2020. The entity reported the
following financial statements pertaining to the first year of operations:
Income Statement
Sales
Cost of goods sold
Inventory – January 1
Purchases
P5,000,000
P1,000,000
3.100.000
P4,100,000
900.000)
Goods available for sale
Inventory - December 31
Gross profit
Operating expenses
Expenses excluding depreciation
Depreciation
Income before income tax
Less: Income tax expense
Net Income
3.200.000
P1,800,000
P 700,000
100.000
800.000
P1,000,000
350.000
P 650,000
Statement of Financial Position
Assets
Cash
Accounts receivable
Inventory
Land
P 500,000
600,000
900,000
800,000
Equipment (Life – 10 years)
Accumulated depreciation
Total assets
P1,000,000
100.000
900.000
P3,700,000
Liabilities and Shareholders' Equity
Accounts payable
Notes payable
Income tax payable
P 500,000
400,000
350.000 P1,250,000
Share capital
Retained Earnings
Net Income
Dividends
P2,000,000
P 650,000
( 200,000)
450.000 2.450.000
Total liabilities and shareholders' equity
P3,700,000
Current cost information on December 31, 2020:
Cost of goods sold at average current cost
Inventory
P3,500,000
1,000,000
1,500,000
1,600,000
Land
Equipment
Required: In a restated set of financial statements prepared in accordance with the
current cost accounting, how much would appear as
1. Realized holding gain
2. Unrealized holding gain
3. Net income
4. Total noncurrent assets
5. Total liabilities and shareholders' equity](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc7751cfb-9a61-40c1-b108-200dd3603e41%2F4a2423af-0148-41f1-8b73-b1cb70001e1b%2Felpf2yb_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 2: ABC Company was formed on January 1, 2020. The entity reported the
following financial statements pertaining to the first year of operations:
Income Statement
Sales
Cost of goods sold
Inventory – January 1
Purchases
P5,000,000
P1,000,000
3.100.000
P4,100,000
900.000)
Goods available for sale
Inventory - December 31
Gross profit
Operating expenses
Expenses excluding depreciation
Depreciation
Income before income tax
Less: Income tax expense
Net Income
3.200.000
P1,800,000
P 700,000
100.000
800.000
P1,000,000
350.000
P 650,000
Statement of Financial Position
Assets
Cash
Accounts receivable
Inventory
Land
P 500,000
600,000
900,000
800,000
Equipment (Life – 10 years)
Accumulated depreciation
Total assets
P1,000,000
100.000
900.000
P3,700,000
Liabilities and Shareholders' Equity
Accounts payable
Notes payable
Income tax payable
P 500,000
400,000
350.000 P1,250,000
Share capital
Retained Earnings
Net Income
Dividends
P2,000,000
P 650,000
( 200,000)
450.000 2.450.000
Total liabilities and shareholders' equity
P3,700,000
Current cost information on December 31, 2020:
Cost of goods sold at average current cost
Inventory
P3,500,000
1,000,000
1,500,000
1,600,000
Land
Equipment
Required: In a restated set of financial statements prepared in accordance with the
current cost accounting, how much would appear as
1. Realized holding gain
2. Unrealized holding gain
3. Net income
4. Total noncurrent assets
5. Total liabilities and shareholders' equity
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