LESTERRIFIC Co. reports profit before tax of ₱200,000 in its 2nd quarter interim financial statements before consideration for the following: 1 Inventory with a carrying amount ₱10,000 has a net realizable value of ₱12,000. It is expected that the change in value will reverse in the 3rd There have been no write-downs of inventory recognized in previous periods. 2 An investment property measured under the cost model has a carrying amount of ₱150,000 but its recoverable amount is ₱140,000. 3 An investment in FVPL measured at acquisition cost of ₱20,000 has a fair value of ₱38,000 as at the end of 2nd the quarter. However, the increase in fair value is expected to be only temporary. 4 No depreciation is recognized during the 2nd The annual straight-line depreciation of items of PPE is ₱60,000. 5 ABC Co. has a policy of providing 12 days paid vacation leaves for its employees. The vacation leaves are vesting and accumulating. Total paid vacation leaves eligibility of employees for the full year is ₱140,000. However, only ₱20,000 worth of paid vacation leaves have been availed of during the quarter. 6 It was discovered that depreciation in the previous year was overstated by ₱7,000. Requirement: Compute for the adjusted profit before tax.
LESTERRIFIC Co. reports profit before tax of ₱200,000 in its 2nd quarter
interim financial statements before consideration for the following:
1 Inventory with a carrying amount ₱10,000 has a net realizable value of ₱12,000. It is expected that the change in value will reverse in the 3rd There have been no write-downs of inventory recognized in previous periods.
2 An investment property measured under the cost model has a carrying amount of ₱150,000 but its recoverable amount is ₱140,000.
3 An investment in FVPL measured at acquisition cost of ₱20,000 has a fair value of ₱38,000 as at the end of 2nd the quarter. However, the increase in fair value is expected to be only temporary.
4 No
5 ABC Co. has a policy of providing 12 days paid vacation leaves for its employees. The vacation leaves are vesting and accumulating. Total paid vacation leaves eligibility of employees for the full year is ₱140,000. However, only ₱20,000 worth of paid vacation leaves have been availed of during the quarter.
6 It was discovered that depreciation in the previous year was overstated by ₱7,000.
Requirement: Compute for the adjusted profit before tax.
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