Problem 22-16 (IAA) Lunar Company provided the following information: 2019 2020 3,000,000 2,200,000 1,500,000 4,500,000 1,500,000 6,000,000 Cash and cash equivalents Inventory Equipment (net). Land Current liabilities (all monetary) Noncurrent liabilities (all monetary) Share capital Retained earnings Sales Inventory, January 1 Purchases 4,250,000 3,000,000 1,400,000 4,500,000 2,000,000 6,500,000 3,000,000 3,000,000 1,650,000 8,000,000 2,200,000 5,200,000 3,000,000 1,700,000 100,000 500,000 350,000 700,000 Inventory, December 31 Distribution and administrative expenses Depreciation Income tax Cash dividend Additional information The pertinent index numbers are: January January 100 100 120 200 1, 2018 1, 2019 December 31, 2019 December 31, 2020 * The land and equipment were acquired on January 1, 2018. The entity was organized on January 1, 2018. The cash dividend was paid December 31, 2020. Required: 1. Prepare a comparative statement of financial position of December 31, 2020 restated to 2020 price level. 2. Prepare an income statement for 2020 restated to 2020 price level. 3. Compute the gain or loss on purchasing power for 2020.

Problem 22-16 (IAA) Lunar Company provided the following information: 2019 2020 3,000,000 2,200,000 1,500,000 4,500,000 1,500,000 6,000,000 Cash and cash equivalents Inventory Equipment (net). Land Current liabilities (all monetary) Noncurrent liabilities (all monetary) Share capital Retained earnings Sales Inventory, January 1 Purchases 4,250,000 3,000,000 1,400,000 4,500,000 2,000,000 6,500,000 3,000,000 3,000,000 1,650,000 8,000,000 2,200,000 5,200,000 3,000,000 1,700,000 100,000 500,000 350,000 700,000 Inventory, December 31 Distribution and administrative expenses Depreciation Income tax Cash dividend Additional information The pertinent index numbers are: January January 100 100 120 200 1, 2018 1, 2019 December 31, 2019 December 31, 2020 * The land and equipment were acquired on January 1, 2018. The entity was organized on January 1, 2018. The cash dividend was paid December 31, 2020. Required: 1. Prepare a comparative statement of financial position of December 31, 2020 restated to 2020 price level. 2. Prepare an income statement for 2020 restated to 2020 price level. 3. Compute the gain or loss on purchasing power for 2020.

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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Question

100%

2. Prepare an income statement for 2020 restated to 2020
Problem 22-16 (IAA)
Lunar Company provided the following information:
2019
2020
3,000,000
2,200,000
1,500,000
4,500,000
1,500,000
6,000,000
3,000,000
700,000
Cash and cash equivalents
Inventory
Equipment (net)
Land
Current liabilities (all monetary)
Noncurrent liabilities (all monetary)
Share capital
Retained earnings
Sales
Inventory, January 1
Purchases
4,250,000
3,000,000
1,400,000
4,500,000
2,000,000
6,500,000
3,000,000
1,650,000
8,000,000
2,200,000
5,200,000
3,000,000
1,700,000
100,000
500,000
350,000
Inventory, December 31
Distribution and administrative expenses
Depreciation
Income tax
Cash dividend
Additional information
The pertinent index numbers are:
January
January
December 31, 2019
December 31, 2020
1, 2018
1, 2019
100
100
120
200
The land and equipment were acquired on January 1, 2018.
The entity was organized on January 1, 2018.
The cash dividend was paid December 31, 2020.
Required:
1. Prepare a comparative statement of financial position ol
December 31, 2020 restated to 2020 price level.
2. Prepare an income statement for 2020 restated to 202
price level.
3. Compute the gain or loss on purchasing power for 20

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