On August 1, 2022, The STUVWXYZ Corporation paid P4,200,000 to Atras-Zhinigang Manufacturing Co. for the development of a vaccine in a period of two years. The amount paid was debited to R & Dexpense (expense method). On December 31, 2022, the company accountant prepared the covering adjusting entry. Prepare the correcting entry (if any) if the adjusting entry made by the accountant on December 31, 2022 is as follow: a. R&D expense 875,000 Prepaid R & D 875,000 b. Prepaid R & D 2,100,000 R&D expense Income from R & D adjustment 2,000,000 c. Prepaid R & D 3,325,000 Accrued R & D Expense 3,325,000 d. Prepaid R & D 875,000 R&D expense 875,000 No entry made
On August 1, 2022, The STUVWXYZ Corporation paid P4,200,000 to Atras-Zhinigang Manufacturing Co. for the development of a vaccine in a period of two years. The amount paid was debited to R & Dexpense (expense method). On December 31, 2022, the company accountant prepared the covering adjusting entry. Prepare the correcting entry (if any) if the adjusting entry made by the accountant on December 31, 2022 is as follow: a. R&D expense 875,000 Prepaid R & D 875,000 b. Prepaid R & D 2,100,000 R&D expense Income from R & D adjustment 2,000,000 c. Prepaid R & D 3,325,000 Accrued R & D Expense 3,325,000 d. Prepaid R & D 875,000 R&D expense 875,000 No entry made
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On August 1, 2022, The STUVWXYZ Corporation paid P4,200,000 to Atras-Zhinigang Manufacturing Co. for the
development of a vaccine in a period of two years. The amount paid was debited to R & Dexpense (expense
method). On December 31, 2022, the company accountant prepared the covering adjusting entry.
Prepare the correcting entry (if any) if the adjusting entry made by the accountant on December 31, 2022
is as follow:
R&D expense
875,000
a.
Prepaid R & D
875,000
b. Prepaid R & D
2,100,000
R &D expense
Income from R & D adjustment
2,000,000
c. Prepaid R & D
3,325,000
Accrued R & DExpense
3,325,000
d. Prepaid R & D
875,000
R&D expense
875,000
е.
No entry made
** Use 24 months for the distribution of expenses.
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