What is the correct answer? Sunrise Company provided the following information onDecember 31, 2020:A personal injury liability suit for P500,000 was broughtagainst Sunrise Company in March 2020.The management and legal counsel of Sunrise Companyconcluded that it is not probable that Sunrise Companywill be responsible for damages and that Pl150,000 is thebest estimate of the damages.In July 2020, Sunrise Company became involved in a taxdispute with the BIR pertaining to 2019 income tax.*In December 2020, a judgment for P400,000 was assessedagainst Sunrise Company by the tax court.Sunrise Company is appealing the amount of thejudgment.The tax advisor and legal counsel of Sunrise Companybelieved it is probable that the assessment can be reducedon appeal by 50%.Sunrise Company signed as guarantor for P200,000 loanby PNB to Sunset Company, a principal supplier ofSunrise.By reason of financial difficulties, it is probable thatSunrise Company shall pay the P200,000 loan with onlya 60% recovery anticipated from Sunset Company.Required:Prepare journal entries to recognize any provișion onDecember 31, 2020,

Contingent liabilities are those liabilities or obligations whose possibilities to arise in future…

Answered: se Company provided the following…

se Company provided the following information aber 31, 2020: personal injury liability suit for P500,000 was broug ainst Sunrise Company in March 2020.

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter18: Accounting Periods And Methods

Section: Chapter Questions

Problem 47P: How do the all events and economic performance requirements apply to the following transactions by...

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Sunrise Company provided the following information on December 31, 2019: A personal injury liability suit for P500,000 was brought against Sunrise Company in March 2019. The management and legal counsel of Sunrise Company concluded that it is not probable that Sunrise Company will be responsible for damages and that P150,000 is the best estimate of the damages. In July 2019, Sunrise Company became involved in a tax dispute with the BIR pertaining to 2018 income tax. In December 2019, a judgment for P400,000 was assessed against Sunrise Company by the tax court. Sunrise Company is appealing the amount of judgment. The tax advisor and legal counsel of Sunrise Company believed it is probable that the assessment can be reduced on appeal by 50%. Sunrise Company signed as guarantor for P200,000 loan by PNB to Sunset Company, a principal supplier of Sunrise. By reason of financial difficulties, it is probable that Sunrise Company shall pay P200,000 loan with only a 60% recovery anticipated…
During 2019 Lian Company became involved in a tax dispute with the BIR. At December 31, 2019, Lian’s tax advisor believed that an unfavorable outcome was probable and the best estimate of additional tax was 750,000, but could be as much as 975,000. After the 2019 financial statements were issued, Leal received and accepted a BIR settlement offer of 825,000. What amount of accrued liability would Leal have reported in its December 31, 2019 statement of financial position?
corcese Inc. is involved in a lawsuit at December 31, 2020. (a) Prepare the December 31 entry assuming it is probable that Scorcese will be liable for $900,000 as a result of this suit. (b) Prepare the December 31 entry, if any, assuming it is not probable that Scorcese will be liable for any payment as a result of this suit.
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Shirmp Tempura Company reported an excess of warranty expense over warranty deductions of P720,000 for the year ended December 31, 2019. This temporary difference will reverse in equal amounts over the years 2020 through 2022. The enacted tax rates are as follows: 2019 - 30% 2020 - 32% 2021 - 34% 2022 - 36% The reporting for this temporary difference at December 31, 2019 would be a A. deferred tax liability of P244,800. B. deferred tax asset of P216,000. C. deferred tax asset of P244,800. D. deferred tax liability of P216,000.