Consider the following worksheet with information extracted from a financial statement: 2020 Assets Liabilities Equity Reported (P) 500 000 100 000 400 000 You believe the firm has omitted a provision pertaining to a lawsuit. You assess this provision is valued at P50 000 and that it will be paid in the next six months. Using the worksheet approach and assuming a corporate tax rate of 30 percent, what would be the change to the total value of the liability account?
Consider the following worksheet with information extracted from a financial statement: 2020 Assets Liabilities Equity Reported (P) 500 000 100 000 400 000 You believe the firm has omitted a provision pertaining to a lawsuit. You assess this provision is valued at P50 000 and that it will be paid in the next six months. Using the worksheet approach and assuming a corporate tax rate of 30 percent, what would be the change to the total value of the liability account?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Consider the following worksheet with information extracted from a financial statement:
2020 Assets Liabilities Equity
Reported (P) 500 000 100 000 400 000
You believe the firm has omitted a provision pertaining to a lawsuit. You assess this provision is valued at P50 000 and that it will be paid in the next six months. Using the worksheet approach and assuming a corporate tax rate of 30 percent, what would be the change to the total value of the liability account?
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