Mango Company has prepared financial statements for 2023. The estimated issuance date is March 15, 2024. Which of the following post-balance-sheet events would require adjustment of the accounts before issuance of the 2023 financial statements? Answer a. Uninsured loss of plant as a result of fire in January 2024 b. Changes in the quoted market prices of securities held as an investment in February 2024 c. Settlement of a lawsuit in January 2024 for which a loss contingency had been recorded at year end 2023 d. Loss on an uncollectible account receivable when a customer filed for bankruptcy following a major flood loss that occurred in January 2024

Mango Company has prepared financial statements for 2023. The estimated issuance date is March 15, 2024. Which of the following post-balance-sheet events would require adjustment of the accounts before issuance of the 2023 financial statements? Answer a. Uninsured loss of plant as a result of fire in January 2024 b. Changes in the quoted market prices of securities held as an investment in February 2024 c. Settlement of a lawsuit in January 2024 for which a loss contingency had been recorded at year end 2023 d. Loss on an uncollectible account receivable when a customer filed for bankruptcy following a major flood loss that occurred in January 2024

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter4: The Balance Sheet And The Statement Of Shareholders' Equity

Section: Chapter Questions

Problem 5C: It is February 16, 2020, and you are auditing Davenport Corporation's financial statements for 2019...

See similar textbooks

Similar questions

Tamarisk Company in its first year of operations provides the following information related to one of its available-for-sale debt securities at December 31, 2020. Amoortization cost $52,100 Fair Value 44,200 Expected credit losses 12,850 What is the amount of the credit loss that Tamarisk should report on this available-for-sale security at December 31, 2020? Prepare the journal entry to record the credit loss, if any (and any other adjustment needed), at December 31, 2020. Assume that the fair value of the available-for-sale security is $57,200 at December 31, 2020, instead of $44,200. What is the amount of the credit loss that Tamarisk should report at December 31, 2020? Assume the same information as for part (c). Prepare the journal entry to record the credit loss, if necessary (and any other adjustment needed), at December 31, 2020.
Morley Company in its first year of operations provides the following information related to one of its available-for-sale debt securities at December 31, 2020. Amortized cost $50,000 Fair value 40,000 Expected credit loss 12,000 a. What is the amount of the credit loss that Morley should report on this available-for-sale security at December 31, 2020? b. Prepare the journal entry to record the credit loss, if any (and any other adjustment needed), at December 31, 2020. c. Assume that the fair value of the available-for-sale security is $53,000 at December 31, 2020, instead of $40,000. What is the amount of the credit loss that Morley should report at December 31, 2020? d. Assume the same information as for part (c). Prepare the journal entry to record the credit loss, if necessary (and any other adjustment needed), at December 31, 2020.
Heinz Company’s post-closing trial balance as of December 31, 2018, and the adjusted trial balance as of December 31, 2019, are shown here: A review of the accounting records reveals the following additional information: a. Bonds payable with a face value, book value, and market value of $14,000 were retired On June 30, 2019. b. Bonds payable with a face value of $8,000 were issued at 90.25 On August 1, 2019. They mature on August 1, 2024. The company uses the straight-line method to amortize the bond discount. c. The company sold a building that had an original cost of $8,000 and a book value of $4,800. The company received $2,200 in cash for the building and recorded a loss of $2,600. d. Equipment with a cost of $4,000 and a book value of $1,400 was exchanged for an acre of land valued at $2,700. No cash was exchanged. e.…
Marigold Company in its first year of operations provides the following information related to one of its available-for-sale debt securities at December 31, 2020. Amortized cost $51,100 Fair value 42,200 Expected credit losses 12,600 A. What is the amount of credit loss that marigold should report on this available-for-sale security at december 31, 2020? Amount of the credit loss $ 8,900 B. Prepare the journal entry to record the credit loss, if any ( and other adjustments needed), at December 31, 2020? date account titles and explanations debit credit 12/31/20 8,900 8,900 Please note that the answer is NOT Debit Loss on available for sale debt securities and Credit avilable for sale debt securities. These are the account titles I can choose from... Accumulated Other…
The case below relates to IAS 10. Indicate whether they are adjusting and non-adjusting events and how they should be treated according to the standard. Facey Company Ltd has an investment worth $1,000,000 in its financial statements at 31 December 2019. Due to the continuing recession, the investment reduced in value to $900,000 by 15 January 2020.
ngent Rover Ltd has a year-end of 30 June 2022. The accountant has prepared the following schedule with details of several events and their proposed treatment in the financial statements. Event Proposed Treatment The notification of a customer's Write off $30,000 debt as it is irrecoverable. bankruptcy who owes $25,000 on 30 June 2022 and now owes $30,000. The liquidator has indicated that the debt will not be recoverable. A major production plant was destroyed by fire on 1 July 2022. No adjustment or reference to the issue is required as the fire took place after the year-end. Liability for dividends payable recognised. Ordinary dividends declared on 1 August 2022 regarding profits for the period ended 30 June 2022. Discovery of a significant fraud on 15 July 2022, resulting in losses to the company. No adjustment is required as the fraud was discovered after the period end. Required: In each of the instances above, explain whether the accountant has proposed the correct treatment…
Events that occur after the December 31, 2026 balance sheet date, but before the balance sheet is issued in 2027, and provide additional evidence about conditions that existed at the balance sheet date and affect the realizability of accounts receivable should be used to record an adjustment to Bad Debt Expense for the year ending December 31, 2026. discussed only in the MD&A (Management's Discussion and Analysis) section of the annual report. disclosed only in the Notes to the Financial Statements. used to record an adjustment directly to the Retained Earnings account.
On December 12, 2021, an investment in equity securities costing $80,000 was sold for $100,000. The total of the sale proceeds was credited to the investment in equity securities account.Required:1. Prepare the journal entry to correct the error, assuming it is discovered before the books are adjusted or closed in 2021. (Ignore income taxes.)2. Prepare the journal entry to correct the error assuming it is not discovered until early 2022. (Ignore income taxes.)
On December 12, 2024, an Investment in equity securities costing $84,000 was sold for $108,000. The total of the sale proceeds was credited to the Investment in equity securities account Required: 1. Prepare the Journal entry to correct the error, assuming it is discovered before the books are adjusted or closed in 2024. (Ignore Income taxes.) 2. Prepare the journal entry to correct the error assuming It is not discovered until early 2025. (Ignore income taxes.)
Assume that Kingbird Company has recently fallen into financial difficulties. By reviewing all available evidence on December 31, 2025, one of Kingbird's creditors, the National American Bank, determined that Kingbird would pay back only 65% of the principal at maturity. As a result, the bank decided that the loan was impaired. If the loss is estimated to be $242,200. What entry should National American Bank make to record this loss? (If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List debit entry before credit entry.) Date Dec. 31, 2025 Account Titles and Explanation Debit Credit
Fleener Company is in the process of refinancing some long-term debt. Its fiscal year ends on December 31, 2016,and its financial statements will be issued on March 15, 2019. Under current IFRS, how would the debt be classified if the refinancing is completed on December 15, 2016? What if instead it is completed on January 15, 2019?
Outpost Designs uses the balance sheet aging method to account for uncollectible debt on receivables. The following is the past-due category information for outstanding receivable debt for 2019. To manage earnings more favorably, Outpost Designs decided to change past-due categories as follows. Complete the following. A. Complete each table by filling in the blanks. B. Determine the difference between total uncollectible. C. Explain how the new total uncollectible amount affects net income and accounts receivable.