Please compute for: 1. Realized holding gain2. Unrealized holding gain3. Net income 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 1PurchasesP5,000,000P1,000,0003.100.000P4,100,000900.000)Goods available for saleInventory - December 31Gross profitOperating expensesExpenses excluding depreciationDepreciationIncome before income taxLess: Income tax expenseNet Income3.200.000P1,800,000P 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 costInventoryP3,500,0001,000,0001,500,0001,600,000LandEquipmentRequired: In a restated set of financial statements prepared in accordance with thecurrent cost accounting, how much would appear as1. Realized holding gain2. Unrealized holding gain3. Net income4. Total noncurrent assets5. Total liabilities and shareholders' equity

Name: Please compute for: 1. Realized holding gain2. Unrealized holding gain
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Description: Please compute for: 1. Realized holding gain2. Unrealized holding gain3. Net income Problem 2: ABC Company was formed on January 1, 2020. The entity reported thefollowing financial statements pertaining to the first year of operations:Income Statemen

We are provided with the income statement and balance sheet of ABC company for the first year of…

Business

Accounting

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 Accumulated depreciation Total assets Equipment (Life - 10 years) 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 P2,000,000 P 650,000 ( 200.000) Dividends 450.000 2.450.000

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) 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 Accumulated depreciation Total assets Equipment (Life - 10 years) 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 P2,000,000 P 650,000 ( 200.000) Dividends 450.000 2.450.000

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

Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is

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Question

Please compute for:

1. Realized holding gain

2. Unrealized holding gain

3. Net income

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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