Mr. Ventura was on his way to deliver merchandise ordered by his customer whenanother driver lost control over his truck and rammed it against the truck of Mr.Ventura. As a result, Ventura sustained injuries, his truck was severely damaged, andall the merchandise were destroyed. Negotiations with the other party went smoothlyand Mr. Ventura was paid the total amount of P3,150,000 for the following:Repair and replacement of truck partsTotal selling price of merchandise destroyed(at P1,000,000 cost)Hospitalization and medical expenses forinjuries sustainedReimbursement for other expenses incurredin relation to the incidentP900,0001,700,000300,000250,000TotalP3,150,000How much of the above is gross income of Mr. Ventura for taxation purposes?a. P3,150,000b. P1,950,000c. P1,700,000d. P700,000

The question is related to taxation. In the given question the details regarding the compensation…

Answered: Mr. Ventura was on his way to deliver…

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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In 2005 waste from Flash Limited destroyed a section of Fletcher’s Land. Members of the community demonstrated, and the company restored the land at a cost of $525,000. In 2006 the same section of Fletcher’s Land was destroyed. The Fletcher’s Land Citizens Association submitted an estimate for $680,000 to restore the land. Flash Limited is refusing to pay indicating that Slow Limited, the other company in the community should pay 50% of the restoration costs. In 2005 Slow Limited refused to pay any of the restoration costs. Flash Limited year end is December 31 2006. Indicate the accounting treatment and the disclosure in the financial statements of Flash Limited. Support your answer with the relevant IFRS.
Frank's Mini Mart sold a piece of equipment on an installment agreement, to a competitor on the other side of town. The other owner failed to make the payments and Frank had to repossess the equipment. What is Frank's gain or loss on repossessed personal property with a fair market value of $12,000 on the date of repossession, where the seller's basis in the installment obligation at the time of repossession is $7,500, and the costs of repossession were $500? (a) Loss of $500. (b) Gain of $4,000. (c) Gain of $4,500 (d) Gain of $5,000.
1
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1. SLM, Inc., with sales of $1,000, has the following balance sheet: SLM, Incorporated Balance Sheet as of 12/31/X0 Labilities and Equit Trade accounts payable Long-term debt Equity Assets Accounts receivable $ 200 Inventory 400 Plant 800 $1,400 $ 200 600 600 $1,400 It earns 10 percent on sales (after taxes) and pays no dividends. a. Determine the balance sheet entries for sales of $1,500 using the per- cent of sales method of forecasting. b. Will the firm need external financing to grow to sales of $1,500? e. Construct the new balance sheet and use newly issued long-term br to cover any financial deficiency, EXINC
Waterway Shoes Foot Inc. is involved in litigation regarding a faulty product sold in a prior year. The company has consulted with its attorney and determined that it is possible that they may lose the case. The attorneys estimated that there is a 45% chance of losing. If this is the case, their attorney estimated that the amount of any payment would be $815000. What is the required journal entry as a result of this litigation? Debit Litigation Expense for $366750 and credit Litigation Liability for $366750. Debit Litigation Expense for $448250 and credit Litigation Liability for $448250. No journal entry is required. Debit Litigation Expense for $815000 and credit Litigation liability for $815000.
Superb Corporation is being sued for illness caused to local residents as a result of negligence on the company's part in permitting the local residents to be exposed to highly toxic chemicals from its plant. Superb’s lawyer states that it is probable that Superb will lose the suit and be found liable for a judgment costing Superb anywhere from $1,200,000 to $6,000,000. However, the lawyer states that the most probable cost is $3,600,000. As a result of the above facts, Superb should accrue Select one: a loss contingency of $3,600,000 and disclose an additional contingency of up to $2,400,000. a loss contingency of $3,600,000 but not disclose any additional contingency. a loss contingency of $1,200,000 and disclose an additional contingency of up to $4,800,000. no loss contingency but disclose a contingency of $1,200,000 to $6,000,000.
Leigh sued an overzealous bill collector and received the following settlement: Damage to her automobile that the collector attempted to repossess $3,300 Physical damage to her arm caused by the collector $15,000 Loss of income while her arm was healing $6,000 Punitive damages $80,000 Question Content Area a. Regarding Leigh's settlement, classify the following as either "Included in" or "Excluded from" her gross income. Included in/Excluded fromIncome • Damage to her automobile that the collector attempted to repossess • Physical damage to her arm caused by the collector • Loss of income while her arm was healing • Punitive damages Question Content Area b. Assume that Leigh also collected $25,000 of damages for slander to her personal reputation caused by the bill collector misrepresenting the facts to Leigh's employer and other creditors. Is this $25,000 included in Leigh's gross income?
Chester is a company dedicated to the transports. On 1st of March 2019, Chester sells its unprofitable segment, a restaurant activity. This segment generated in 2019 a net loss of $92,000 and its assets sold at a loss of $80,000. On 1" of May 2019, an earthquake destroyed one of Chester's offices. The company suffered a loss of $230,000. On 31st of December 2019, the board of managers decides to change the depreciation method from straight line to 200% declining balance method for the fleet of trucks acquired the 1st of January 2016. The effect of the change is an additional expense of $96.000 For the while year 2019 Chester reported an income from continuing operations of $1,950,000. Applicable tax rate is 30%. Chester had 200,000 shares of capital stock outstanding throughout the year Question 1: Prepare a condensed income statement including proper presentation of the discontinued restaurant operations and the extraordinary loss. Include all aporooriate earnings per share fieures.
You have an HO policy with the following limits: A $75,000 (dwelling) B-$ 7,500 (other structures) C-$25,000 (personal property). A tornado strikes your property. You lose your house, which is worth $65,000 at the time of the loss. You also lose an unattached shed worth $8,000, and personal property worth $30,000. You will collect? (assume $0 deductible, ignore the ACV calculation and assume there is no fraud or other unusual circumstances surrounding the loss.) OA$107,500 OB. $97,500 OC.$103,000
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Watson agreed to buy Ingram’s house for $355,000. The contract provided that Watson deposit $15,000 as earnest money and that “in the event of default by the Buyer, earnest money shall be forfeited to Seller as liquidated damages, unless Seller elects to seek actual damages or specific performance.” Because Watson did not timely comply with all of the terms of the contract, nine months after the Watson sale was to occur, Ingram sold the house to a third party for $355,000. Is Ingram entitled to Watson’s $15,000 earnest money as liquidated damages? Explain.

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