Problem 2: ABC Company was formed on January 1, ollowing financial statements pertaining to the first yea ncome Statement Sales Cost of goods sold Inventory - January 1 Purchases Goods available for sale Inventory-December 31 Gross profit Operating expenses Expenses excluding depreciation Depreciation ncome before income tax Less: Income tax expense Net Income Statement of Financial Position Assets Cash Accounts receivable nventory Land Equipment (Life- 10 years) Accumulated depreciation Total assets Liabilities and Shareholders' Equity Accounts payable Notes payable ncome tax payable Share capital Retained Earnings Net Income Dividends P 650 ( 200 Total liabilities and shareholders' equity Current cost information on December 31, 2020: Cost of goods sold at average current cost nventory Land Equipment
Problem 2: ABC Company was formed on January 1, ollowing financial statements pertaining to the first yea ncome Statement Sales Cost of goods sold Inventory - January 1 Purchases Goods available for sale Inventory-December 31 Gross profit Operating expenses Expenses excluding depreciation Depreciation ncome before income tax Less: Income tax expense Net Income Statement of Financial Position Assets Cash Accounts receivable nventory Land Equipment (Life- 10 years) Accumulated depreciation Total assets Liabilities and Shareholders' Equity Accounts payable Notes payable ncome tax payable Share capital Retained Earnings Net Income Dividends P 650 ( 200 Total liabilities and shareholders' equity Current cost information on December 31, 2020: Cost of goods sold at average current cost nventory Land Equipment
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Realized holding gain ?
![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
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
P5,000,000
P1,000,000
3.100.000
P4.100.000
( 900.000)
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
Equipment (Life - 10 years)
Accumulated depreciation
Total assets
P 500,000
600,000
900,000
800,000
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
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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F66bdeefa-2eb0-4e5a-be04-9e186de37e15%2F93037134-dd1f-47ac-a6b1-f9a234ca986f%2F7ijb644_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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
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
P5,000,000
P1,000,000
3.100.000
P4.100.000
( 900.000)
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
Equipment (Life - 10 years)
Accumulated depreciation
Total assets
P 500,000
600,000
900,000
800,000
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
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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