Problem 22-16 (IAA) Lunar Company provided the following information: 2019 2020 3,000,000 2,200,000 1,500,000 4,500,000 1,500,000 6,000,000 Cash and cash equivalents Inventory Equipment (net). Land Current liabilities (all monetary) Noncurrent liabilities (all monetary) Share capital Retained earnings Sales Inventory, January 1 Purchases 4,250,000 3,000,000 1,400,000 4,500,000 2,000,000 6,500,000 3,000,000 3,000,000 1,650,000 8,000,000 2,200,000 5,200,000 3,000,000 1,700,000 100,000 500,000 350,000 700,000 Inventory, December 31 Distribution and administrative expenses Depreciation Income tax Cash dividend Additional information The pertinent index numbers are: January January 100 100 120 200 1, 2018 1, 2019 December 31, 2019 December 31, 2020 * The land and equipment were acquired on January 1, 2018. The entity was organized on January 1, 2018. The cash dividend was paid December 31, 2020. Required: 1. Prepare a comparative statement of financial position of December 31, 2020 restated to 2020 price level. 2. Prepare an income statement for 2020 restated to 2020 price level. 3. Compute the gain or loss on purchasing power for 2020.
Problem 22-16 (IAA) Lunar Company provided the following information: 2019 2020 3,000,000 2,200,000 1,500,000 4,500,000 1,500,000 6,000,000 Cash and cash equivalents Inventory Equipment (net). Land Current liabilities (all monetary) Noncurrent liabilities (all monetary) Share capital Retained earnings Sales Inventory, January 1 Purchases 4,250,000 3,000,000 1,400,000 4,500,000 2,000,000 6,500,000 3,000,000 3,000,000 1,650,000 8,000,000 2,200,000 5,200,000 3,000,000 1,700,000 100,000 500,000 350,000 700,000 Inventory, December 31 Distribution and administrative expenses Depreciation Income tax Cash dividend Additional information The pertinent index numbers are: January January 100 100 120 200 1, 2018 1, 2019 December 31, 2019 December 31, 2020 * The land and equipment were acquired on January 1, 2018. The entity was organized on January 1, 2018. The cash dividend was paid December 31, 2020. Required: 1. Prepare a comparative statement of financial position of December 31, 2020 restated to 2020 price level. 2. Prepare an income statement for 2020 restated to 2020 price level. 3. Compute the gain or loss on purchasing power for 2020.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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