18. On December 31, 2012, Columbia Company shows the data presented in the image with respect to its matured obligation. The company is threatened with a court suit if it could not pay its maturing debt. Accordingly, the company enters into an agreement with the creditor for the transfer of a non-cash asset in full settlement of the mortgage. The agreement provides for the transfer of real estate carried in the books of Columbia at P3,000,000. The real estate has a current fair market value of P4,500,000. What amount should Columbia recognize in profit or loss for the year 2012 as a result of this transaction? * Notes payable P5,000,000 Accrued Interest Payable 500,000 a. P500,000 b. P1,000,000 c. P1,500,000 d. P2,500,000
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- to be settled on Day 4. If the entity uses the trade date n entity commits to sell a financial asset on Day 1. The sale is accounting, which of the following statements is correct? The fair value change between Days 1 and 4 is recognized. a An 1. ses a. The asset is derecognized, and the gain or loss on the sale is recognized, on Day 4. The asset is derecognized, and the gain or loss on the sale is recognized, on Day 1. i The asset is derecognized only when the sale price is lly he collected.Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended February 1, 2020, Does the company separately report current assets and long-term assets, as well as current liabilities and long-term liabilities? Are any investments shown as a current asset? Why? In which liability account would the company report the balance of its gift card liability? What method does the company use to depreciate its property and equipment?3. What should be reported as noncurrent liability from this transaction at December 31, 2021 after adjusting entries are made assuming that the effective interest method is used? * On January 1, 2021, Better Company sold property to Best Company. There was no established exchange price for the property, and Best gave Better a P,000,000 non-interest bearing note payable in 5 equal annual installments of P400,000, with the first payment due December 31, 2021. The prevailing rate of interest for a note of this type is 10%. The present value of the note at 10% was P758,160 at January 1, 2021. What should be the balance of the Discount on Notes Payable account on the books of Better Company at December 31, 2021 after adjusting entries are made assuming that the effective interest method is used? 2758,160 2633,976 497,374 2136,602 none of them
- Entity A issues an instrument that is re-purchasable by delivering cash or another financial asset. FHo 4. However, Entity A's All rights belongs to respective author Downloaded by era 2020 ean cszmoeaton@gma.com) buving the original co 338 PAS 32 contractual obligation to repurchase the instrument is conditional on the holder (the counterparty) exercising its right to redeem. Which of the following statements is correct from the perspective of Entity A? a. The instrument is a financial liability because when the holder exercises its redemption right, Entity A does not have the unconditional right to avoid making the payment. b. The instrument is an equity instrument because Entity A's contractual obligation to deliver cash or another financial asset is conditional on the holder exercising its right to payment. c. Entity A initially classifies the instrument as an equity instrument. However, when the holder exercises its redemption right, the instrument is reclassified to financial…On December 28, 2022, Anne Company commits itself to purchase a financial asset to be classified as held for trading for P800,000, its fair value on commitment (trade) date. This security has a fair value of P801,000 and P802,500 on December 31, 2022 (Anne's financial year-end), and January 5, 2023 (settlement date), respectively. 13. If Anne applies the trade date accounting method to account for regular-way purchases of its securities, how much should gain be recognized on January 5, 2023? e. P800,000 f. P1,500 g. P1,000 h. POSplish Brothers Ltd. is a publicly listed company following IFRS. Assume that on December 31. 2020, the carrying amount of land on the statement of financial position (SFP) is $505.000. Management determines that the land's value in use is $435.000 and that the fair value less costs to sell is $400.000. Using the rational entity impairment model, prepare the journal entry required, if any, to record the impairment loss. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit December 31, 2020
- Plant & Company plans to convert to IFRSs with a date of transition to IFRSs of 1 January 2X22. Under previous GAAP certain non-derivative financial assets have been derecognized from the statement of financial position in 2x20. Such financial assets would not have been derecognized if IFRSs had been applied at the time that they were derecognized. Select the best response. Plant & Company must recognize non-derivative financial assets that have been derecognized in accordance with previous GAAP in the opening IFRS statement of financial position if they did not qualify for derecognition under IFRSs. Plant & Company must never recognize non-derivative financial assets that have been derecognized in accordance with previous GAAP. Plant & Company must not recognize non-derivative financial assets that have been derecognized in accordance with previous GAAP unless they qualify for recognition as a result of a later transaction or event. Plant & Company must determine if the non-derivative…Ayayai Automotive is looking to expand its operations and has approached Dynatech Garage to acquire its business. Dynatech has agreed to sell if Ayayai assumes the mortgage on Dynatech's building as part of the sale. The fair value of Dynatech's identifiable assets and identifiable liabilities are: Inventory: 149000. Buildings: 949000. Land: 349000. Mortage payable (274000). Net identifiable assets: 1,173,000. Assuming Ayayai purchases the business for $Record the journal entry for the purchase by Ayayai Automotive. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) Account Titles Debit Credit 1,324,000(a) On January 1, 2025, Sunland Corporation sold a building that cost $261,490 and that had accumulated depreciation of $102,790 on the date of sale. Sunland received as consideration a $251,490 non-interest-bearing note due on January 1, 2028. There was no established exchange price for the building, and the note had no ready market. The prevailing rate of interest for a note of this type on January 1, 2025, was 9%. At what amount should the gain from the sale of the building be reported? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) The amount of gain should be reported eTextbook and Media Sun fr tA $
- A Corp. sold a machinery to a buyer for P1,900,000 on January 1, 2021. Because of the entity’s commitments to its customers to provide their needs for the next three years, A Corp. simultaneously leased back the machinery. The transfer of the asset to the buyer qualifies to be accounted for as a sale under IFRS 15. Information relating to this transaction follows: Fair value of machinery - P2,200,000 Carrying amount of machinery - P1,700,000 Remaining useful life of machinery - 8 years Lease term - 3 years Annual rent payable at the end of each year, starting on December 31, 2021 - P500,000 Market rate of interest - 10% (Round off the PV factor to four decimal places, then do not round off during the computation)How much is the Right of Use Asset at January 1, 2021? How much is the Gain on Sale-Leaseback?On January 1, 20x8, Pares Company classified its property interest under an operating lease from Allan Company, the lessor, as investment property. The asset was recognized at P 8M with an estimated remaining useful life of 15 years. The fair value of such asset is P 8.1M on December 31, 20x8. Pares adopts the cost model in valuing its investment properties subsequent to initial recognition. The investment property account of Pares, excluding the transaction described above, is composed of the following Asset CV 1/1/x8 Remaining Useful Life FV 12/31/x8 A 4.5M NA 5M B 6.55M 16 4.89M C 10.6M 20 11.050MIf Pares uses the straight line method in computing for depreciation expense, how much is the net amount of investment property to be reported in the December 31, 20x8 statement of financial positionDuring 2021, Carla Vista Company purchased the net assets of Sandhill Corporation for $2219800. On the date of the transaction, Sandhill had $605400 of liabilities. The fair value of Sandhill's assets when acquired were as follows: Current assets $1089720 Noncurrent assets 2542680 $3632400 How should the $807200 difference between the fair value of the net assets acquired ($3027000) and the cost ($2219800) be accounted for by Carla Vista?