The statement of financial position and profit or loss of an entity on December 31, 20x1 shows the following information: Cash and cash equivalents     1,500,000 Trade and other receivables    3,000,000 Inventories    9,000,000 Investment property (Cost model) 3,500,000 Investment in associate 2,000,000 Property, plant and equipment 12,500,000 Total assets 31,500,000 Trade and other payables 12,250,000 Current tax payable     4,500,000 Deferred tax liability   1,750,000 Ordinary share capital   5,000,000 Retained earnings   6,750,000 Other components of equity  1,250,000 Total liabilities & equity   31,500,000 Revenue  5,600,000 Cost of sales   (2,000,000) Gross profit  3,600,000 Distribution of cost    (780,000) Administrative expenses   (900,000) Impairment loss (reversal) on assets held for sale Finance costs (300,000) Share of profit of associates 240,000 Profit for the period from continuing operations   1,860,000 Discontinued Operations: Profit for the period from discontinued operations   -_ Profit for the period  1,302,000 On December 31, 20x1, the entity commits to a plan to sell an equipment with carrying amount of P2,800,000. The following will be sold together with the equipment accounts receivable with carrying amount of P200,000,  inventories with carrying amount of P560,000 and accounts payable with carrying amount of P360,000. The entity determines that the equipment has a fair value less costs to sell of P1,600,000. The carrying amounts of the other assets and the liability approximate their fair value less costs to sell. All the conditions of PFRS 5 are met. Requirement: Prepare the December 31, 20x1 classified statement of financial position and the statement of profit or loss of the entity. Ignore the effects of income taxes.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The statement of financial position and profit or loss of an entity on December 31, 20x1 shows the following information:

Cash and cash equivalents     1,500,000
Trade and other receivables    3,000,000

Inventories    9,000,000
Investment property (Cost model) 3,500,000
Investment in associate 2,000,000
Property, plant and equipment 12,500,000
Total assets 31,500,000


Trade and other payables 12,250,000
Current tax payable     4,500,000
Deferred tax liability   1,750,000
Ordinary share capital   5,000,000
Retained earnings   6,750,000
Other components of equity  1,250,000
Total liabilities & equity   31,500,000
Revenue  5,600,000
Cost of sales   (2,000,000)
Gross profit  3,600,000
Distribution of cost    (780,000)
Administrative expenses   (900,000)


Impairment loss (reversal) on assets held for sale
Finance costs (300,000)
Share of profit of associates 240,000
Profit for the period from continuing operations   1,860,000


Discontinued Operations:
Profit for the period from discontinued operations   -_
Profit for the period  1,302,000


On December 31, 20x1, the entity commits to a plan to sell an equipment with carrying amount of P2,800,000. The following will be sold together with the equipment accounts receivable with carrying amount of P200,000, 
inventories with carrying amount of P560,000 and accounts payable with carrying amount of P360,000. The entity determines that the equipment has a fair value less costs to sell of P1,600,000. The carrying amounts of the other assets and the liability approximate their fair value less costs to sell. All the conditions of PFRS 5 are met.

Requirement: Prepare the December 31, 20x1 classified statement of financial position and the statement of profit or loss of the entity. Ignore the effects of income taxes. 

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