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 Land Equipment P3,500,000 1,000,000 1,500,000 1,600,000

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 Land Equipment P3,500,000 1,000,000 1,500,000 1,600,000

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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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 noncurrent assets?

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

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Answer #1-4 Thanks