Advanced Accounting
14th Edition
ISBN: 9781260247824
Author: Joe Ben Hoyle, Thomas F. Schaefer, Timothy S. Doupnik
Publisher: RENT MCG
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ABC Company is preparing its
December 31, 2019 financial
statements. The financial statements
are authorized for issue on March 31,
2020. Income before 25% income
tax but after consideration of these
items amounted to P 5.4M. The
following occurred:
March 15, 2020 - dividend of 3M
was declared and a contractual profit
share payment of 90OT was made,
based on the profit for the year
ended 12/31/2019.
February 1, 2020 - customer settled
to the entity its due amounting to P
550,000 for the past 5 months.
Allowance worth P 60T was made
against this account in the financial
statements.
March 20, 2020 - manufacturing
plant was partially destroyed by fire
last December 20, 2019. Estimate of
a professional regarding the damage
was received on the given date
which amounted to P 950T.
What total before- tax amount
should be recognized in profit or loss
for 2019 to reflect adjusting events
after the reporting period?
some other amount
1,670,000
1,750,000
1,790,000
How much should be reported in the 2019 Profit or Loss?
On April 10, 2019, Amelia Inc. purchased 450 shares of its own common stock in the market for $22 per share. On
September 28, 2019, the company sold 270 of these shares in the open market at a price of $25 per share.
Required:
a. Use the horizontal model to show the effects on Amelia Inc's financial statements of the purchase of the treasury stock on April 10,
2019. Indicate the financial statement effect. (Enter decreases with a minus sign to indicate a negative financial statement effect.)
Balance Sheet
Income Statement
Assets
Liabilities
Stockholders' Equity
Net Income
Revenues
Expenses
b. Use the horizontal model to show the effects on Amelia Inc's financial statements of the sale of the treasury stock on September 28,
2019. Indicate the financial statement effect. (Enter decreases with a minus sign to indicate a negative financial statement effect.)
Balance Sheet
Income Statement
Assets
Liabilities
Stockholders' Equity
Net Income
Revenues
Expenses
+
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