In a restated set of financial statements prepared in accordance with the current cost accounting, how much would appear as Total liabilities and shareholders' equity? Problem 2: ABC Company was formed on January 1, 2020. The entity reported thefollowing financial statements pertaining to the first year of operations:Income StatementSalesCost of goods soldInventory – January 1PurchasesP5,000,000P1,000,0003.100.000P4,100,000(900,000) 3.200.000Goods available for saleInventory - December 31Gross profitOperating expensesExpenses excluding depreciationDepreciationIncome before income taxLess: Income tax expenseNet IncomeP1,800,000P 700,000100.000800.000P1,000,000350.000P 650,000Statement of Financial PositionAssetsCashAccounts receivableInventoryLandP 500,000600,000900,000800,000Equipment (Life – 10 years)Accumulated depreciationTotal assetsP1,000,000100.000900.000P3.700,000Liabilities and Shareholders' EquityAccounts payableNotes payableIncome tax payableP 500,000400,000350.000 P1,250,000Share capitalRetained EarningsNet IncomeDividendsP2,000,000P 650,000( 200,000)450.000 2.450.000Total liabilities and shareholders' equityP3.700,000Current cost information on December 31, 2020:Cost of goods sold at average current costInventoryP3,500,0001,000,0001,500,0001,600,000LandEquipment

Answered: Image /qna-images/answer/0764e414-a98f-420c-8788-4555f8ea78a7.jpg

Answered: In a restated set of financial…

In a restated set of financial statements prepared in accordance with the current cost accounting, how much would appear as Total liabilities and shareholders' equity?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Give an example of pre-paid expenses and show the impact on the balance sheet?

A: The balance sheet is the important financial statement of the business. It tells about the financial…

Q: from an analysis of the retained earnings columns, compute the net income or net loss

A: Retained earning is part of total income available after all distribution. It includes current year…

Q: Which financial ratio measures a company's ability to pay its short-term obligations? a)…

A: A financial ratio is a quantitative relationship between two or more financial figures obtained from…

Q: What accounts would you see on a Balance Sheet and/or Income Statement, if a company had inventory?

A: The objective of the question is to identify the accounts that would appear on a company's Balance…

Q: Which type of debit account is balanced in the income statement columns of a work sheet?…

A: Income statement: It is a financial statement that calculate the net income after deducting all…

Q: What is the income-statement method of accounting

A: An income-statement method is an accounting system wherein the allowance for uncertainty in accounts…

Q: Organize the following under Income Statement, Share Holder's Equity, and Balance Sheet. a.…

A: The financial statement is used for reporting the financial performance of the company over a…

Q: What is the name of the accounting concept in which revenue earned during the accounting period…

A: An accrual is a journal entry that is used to recognize revenues and expenses that have been earned…

Q: Which of the following is not a management accounting report? A.Income statement B.Sales forecast…

A: Management accounting reports: Management accounting reports are those reports which are prepared…

Q: Which of the following would not be found on a single-step income statement? Revenues. Gross…

A: The single-step format uses only one subtraction to arrive at net income. Here expenses are deducted…

Q: What major items are included in the Retained Earnings Statement?

A: Retained earnings statement is financial statements that states firm income after every payment.…

Q: The amount of income a company reports in its financial statements is known as ________. Group of…

A: The objective of the question is to identify the correct term for the income a company reports in…

Q: Briefly explain the following: Balance Sheet Income Statement Statement of Changes in Financial…

A: Balance sheet: Balance sheet is a main part of financial statement. It shows as on date financial…

Q: Which financial statement would you look at to understand a company's revenues, cost of goods sold,…

A: The purpose of financial statements is to provide information about a company's operations and…

Q: Describe how the times interest earned ratio is used to evaluate a company’s financial condition

A: Times interest earned ratio also known as interest coverage ratio is the name of a solvency ratio…

Q: Computing liquidity, working captial and current ratio. Computing measures of profitability, profit…

A: Liquidity ratios emphasizes on the company’s ability to fulfill the current obligations out of the…

Q: Which of the following is NOT considered to be an operating expense on the income statement? Group…

A: Theses are the main expenses of the firm that are necessary for making the product and smooth…

Q: How does the income statement differ from the balance sheet withregard to the time period reported?

A: A balance sheet is a statement which provides financial data related to the assets, liabilities and…

Concept explainers

Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.

Question

In a restated set of financial statements prepared in accordance with the current cost accounting, how much would appear as 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) 3.200.000
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
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

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 3 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

The income statement might also be called all of the following except: Group of answer choices Statement of operations The P&L Statement of financial position Profit and loss statement
The valuation method primarily used in the balance sheets of business entities is a. current exit value b. historical cost c. present value d. net realizable value
A primary focus of financial reporting about a company's performance during an accounting period is information related to the company's: a. Balance Sheet b. Income Statement c. Comprehensive Income d. Cash Flows
What key financial aspects do accounting ratios measure?
Business ratios of financial statements are generally categorized as one of the following areas, EXCEPT Select one: a. Leverage b. Profitability c. Net Present Value d. Liquidity e. Efficiency (or Activity)
Using the information from 27A prepare the following ratios: gross profit margin profit margin return on assets earnings per share current ratio acid test ratio debt ratio Indicate what each is used for (ie: measuring efficiency, solvency etc)
Which is the CORRECT order for items to appear on the income statement? Group of answer choices sales revenue, gross profit, net income, operating expenses cash, accounts receivable, inventory, property/plant/equipment, intangible assets sales revenue, operating expenses, gross profit, net income sales revenue, cost of goods sold, gross profit, operating expenses sales revenue, gross profit, cost of goods sold, operating expenses
For each period that an income statement is presented, what must a company disclose about its EPS?
What is the difference between the time periods listed on an income statementand on a balance sheet?
Financial ratios utilized to manage a business falling under the categories of profitability,asset utilization,liquidity,& debt utilization.
Listing Expenses by Function vs Nature Question; How would you list/categorize the expenses (Operating Expenses) in a single-step/multiple-step income statement by nature or by function? Some e.g's/explanation would be very helpful.
With which equation can be calculated from the final balance sheet, beginning balance sheet and the net profit of a period, if the company gave dividends?