FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Related questions
Question
Please show the solution in good accounting form
8. ROSE Company entered into a lawsuit on December 20, 2021, and recognized on the same date a provision of ₱2,000,000. On February 28, 2022, when the financial statements for the year ended December 31, 2021, had not yet been authorized for issue, the case was settled and the court decided the final total damages to be paid by the entity at ₱3,000,000. In addition, the Company has a loan payable of ₱2,000,000 due on June 30, 2022. On January 1, 2022, before the authorization of the issuance of financial statements, the bank agreed to refinance the loan, extending the maturity to June 30, 2024. Also, another loan amounting to ₱7,000,000 due on December 1, 2022, was obtained by the Company on January 2, 2022, from BPI. ROSE Company has the discretion to refinance or roll over the loan for at least twelve months from December 31, 2022. At what amount should the current liability be presented in the statement of financial position?
a. ₱ 4,000,000
b. ₱ 5,000,000
c. ₱ 12,000,000
d. ₱ 10,000,000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution
Trending nowThis is a popular solution!
Step by stepSolved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- 11arrow_forwardIn 2019, A.M.E. Corporation's accountant incorrectly expensed the cost of a major repairs to one of its equipment. The repairs would prolong the life of the asset beyond its current estimated useful life. Which of the following is (are) true? Question 18 options: Income in 2019 is understated. Income in future years is overstated. Corporation's assets in 2019 will be understated. All of these answer choices are truearrow_forwardCocoa Corporation is preparing its December 31, 2023 financial statements. On March 1, the company settled a lawsuit for which it had accrued a contingent liability (loss) of $1,600,000. The amount of the settlement was $1,750,000. The financial statements were issued on March 10, 2024. Which of the following is correct regarding the settlement of the lawsuit? Question 9Answer a. The additional loss of $150,000 will be reported in the 2024 financial statements. b. No contingent liability will be reported on the 2023 Balance Sheet since the suit has been settled. c. This is not a recognized subsequent event because this information about the settlement was not known at year-end. Therefore, no adjustment is required. d. Cocoa should make an adjusting entry to adjust the estimated loss to the actual amount. Net income for 2023 will decrease by $150,000 (ignoring taxes).arrow_forward
- sarrow_forwardIn May 2019, Colt Company filed suit against Johnson Company seeking P1,900,000 damages for patent infringement. A court verdict in November 2019 awarded Colt Company P1,500,000 in damages, but Johnson Company's appeal is not expected to be decided before 2020. The legal counsel believed it is probable that Colt Company will be successful against Johnson Company for an estimated amount in the range between P800,000 and P1,100,000, with P1,000,000 considered the most likely amount. What amount should Colt Company record as income from the lawsuit for the December 31, 2019? year endedarrow_forwardSwifty Company incurred $551000 of research and development cost in its laboratory to develop a patent granted on January 1, 2027. On July 31, 2027, Swifty paid $83600 for legal fees in a successful defense of the patent. The total amount debited to Patents through July 31, 2027, isarrow_forward
- Bridgeport Corporation commenced operations in early 2025. The corporation incurred $44,500 of costs such as fees to underwriters, legal fees, state fees, and promotional expenditures during its formation. Prepare journal entries to record the $44,500 expenditure and 2025 amortization, if any. (Credit account titles are automatically indented when 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. List all debit entries before credit entries.). Account Titles and Explanation (To record costs incurred) (To record amortization expense) Debit Creditarrow_forwardDengararrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education