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The company’s building was appraised at the start of 2021.  The report of the actuary indicated the following data:                                                                                                  Historical Cost             Appraised Value                                     Cost                                         P  200,000.00              P  360,000.00                                     Accumulated Depreciation            80,000.00                   120,000.00                                                                                     P  120,000.00              P   240,000.00   The company depreciated its building for the year 2021 equal to 10% of the appraised value.  Based on the report of the appraiser, the remaining life of the building is 5 years. Required: adjusting entries

The company’s building was appraised at the start of 2021.  The report of the actuary indicated the following data:                                                                                                  Historical Cost             Appraised Value                                     Cost                                         P  200,000.00              P  360,000.00                                     Accumulated Depreciation            80,000.00                   120,000.00                                                                                     P  120,000.00              P   240,000.00   The company depreciated its building for the year 2021 equal to 10% of the appraised value.  Based on the report of the appraiser, the remaining life of the building is 5 years. Required: adjusting entries

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The company’s building was appraised at the start of 2021.  The report of the actuary indicated the following data: 

           

                                                                                    Historical Cost             Appraised Value

                                    Cost                                         P  200,000.00              P  360,000.00

                                    Accumulated Depreciation            80,000.00                   120,000.00

                                                                                    P  120,000.00              P   240,000.00

 

The company depreciated its building for the year 2021 equal to 10% of the appraised value.  Based on the report of the appraiser, the remaining life of the building is 5 years.

Required: adjusting entries

You have been engaged to audit FAR EASTERN COMPANY, a new client, for the year ended, December 31, 2021. The company prepared the trial balance set forth below, as of December 31,2021,the close of its second year of operations. Account Titles Unadjusted Trial Balance Debit Credit Cash 112,600.00 Marketable Securities 72,000.00 Allowance for decline in value of securities Accounts Receivable - Trade 1,758,220.00 Allowance for doubtful accounts 40,000.00 Accounts Receivable - Others Advances to affiliate 48,000.00 250,000.00 Inventory, December 31, 2021 Property, Plant and Equipment Accumulated Depreciation 2,770,000.00 Accounts Payable Income Tax Payable Long-term Debt Ordinary Share Capital Retained Earnings Revaluation Increment Sales Cost of Sales 2,269,604.00 170,622.00 Operating Expenses Other Charges 100,000.00 Provision for Income Taxes (35%) 80,954.00 Discontinued Operations (Net) 6,500.00 Cumulative Effect of Change in Accounting Principle (Net) 13,000.00 7,691,500.00 20,000.00 68,100.00 1,240,000.00 408,616.00 71,260.00 60,000.00 2,042,000.00 770,000.00 240,000.00 2,771,524.00 7,691,500.00
Transcribed Image Text:You have been engaged to audit FAR EASTERN COMPANY, a new client, for the year ended, December 31, 2021. The company prepared the trial balance set forth below, as of December 31,2021,the close of its second year of operations. Account Titles Unadjusted Trial Balance Debit Credit Cash 112,600.00 Marketable Securities 72,000.00 Allowance for decline in value of securities Accounts Receivable - Trade 1,758,220.00 Allowance for doubtful accounts 40,000.00 Accounts Receivable - Others Advances to affiliate 48,000.00 250,000.00 Inventory, December 31, 2021 Property, Plant and Equipment Accumulated Depreciation 2,770,000.00 Accounts Payable Income Tax Payable Long-term Debt Ordinary Share Capital Retained Earnings Revaluation Increment Sales Cost of Sales 2,269,604.00 170,622.00 Operating Expenses Other Charges 100,000.00 Provision for Income Taxes (35%) 80,954.00 Discontinued Operations (Net) 6,500.00 Cumulative Effect of Change in Accounting Principle (Net) 13,000.00 7,691,500.00 20,000.00 68,100.00 1,240,000.00 408,616.00 71,260.00 60,000.00 2,042,000.00 770,000.00 240,000.00 2,771,524.00 7,691,500.00
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