Problem 2: ABC Company was formed on January 1, 2020. The entity reported the following financial statements pertaining to the first year of operations: Income Statement Sales Cost of goods sold Inventory - January 1 Purchases P5,000,000 P1,000,000 3.100.000 P4,100,000 ( 900,000) 3.200.000 Goods available for sale Inventory - December 31 Gross profit Operating expenses Expenses excluding depreciation Depreciation Income before income tax Less: Income tax expense Net Income P1,800,000 P 700,000 100.000 800.000 P1,000,000 350.000 P 650.000 Statement of Financial Position Assets Cash Accounts receivable Inventory Land P 500,000 600,000 900,000 800,000 Accumulated depreciation Total assets Equipment (Life - 10 years) P1,000,000 100.000 900.000 P3,700,000 Liabilities and Shareholders' Equity Accounts payable Notes payable Income tax payable P 500,000 400,000 350.000 P1,250,000 Share capital Retained Earnings Net Income P2,000,000 P 650,000 ( 200.000) Dividends 450.000 2.450.000
Problem 2: ABC Company was formed on January 1, 2020. The entity reported the following financial statements pertaining to the first year of operations: Income Statement Sales Cost of goods sold Inventory - January 1 Purchases P5,000,000 P1,000,000 3.100.000 P4,100,000 ( 900,000) 3.200.000 Goods available for sale Inventory - December 31 Gross profit Operating expenses Expenses excluding depreciation Depreciation Income before income tax Less: Income tax expense Net Income P1,800,000 P 700,000 100.000 800.000 P1,000,000 350.000 P 650.000 Statement of Financial Position Assets Cash Accounts receivable Inventory Land P 500,000 600,000 900,000 800,000 Accumulated depreciation Total assets Equipment (Life - 10 years) P1,000,000 100.000 900.000 P3,700,000 Liabilities and Shareholders' Equity Accounts payable Notes payable Income tax payable P 500,000 400,000 350.000 P1,250,000 Share capital Retained Earnings Net Income P2,000,000 P 650,000 ( 200.000) Dividends 450.000 2.450.000
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
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 4RE: Refer to RE22-2. Assume Heller Company had sales revenue of 510,000 in 2019 and 650,000 in 2020....
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Please compute for:
1. Realized holding gain
2. Unrealized holding gain
3. Net income
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