y -4(AICPA Adapted) yen AG : 0b, 2021, Mill Company incurred a P1,000,000 net loss from onl ofa busines segment. Also, on June 30, 2021 eet read p00 for property taxes assessed for the calertdar year 302 a unt should be included in th ss al amo . juded \¢ determination of the net it joss forthe six-month interim period ended June 30, 2021? jp? 90,000 ® (200,000 ® %990,000 & 790,000 ction 1-4 Answer b i qgs from disposal of segment 1,000,000 we froves (400,000 x 6/12) 00000 asl amount 1,200,000 effects ofa disposal of segment of business are reported separately inthe interim periods in which they occur. The property taxes are sfocated over the interim periods reported. problem 11-5 (LAA) gyerest Company has historically reported bad debt expense of 5% of glesineach quarter. For the current year, the entity followed the same provedure in the three quarters of the year. However, in the fourth cuarter, the entity determined that bad debt expense for the entire year ould be P450,000. Sales in each quarter of the year were first quarter 72,000,000, second quarter P 1,500,000, third quarter P2,500,000 and fourth quarter P4,000,000. What amount of bad debt expense should be recognized for the fourth quarter? 2. 200,000 6, 150,000 ¢, 300,000 «400,000 Solution 11-5 Answer b Bad debt expense for the entire year 450,000 Bad debt expense: Fitst quarter (5% x 2,000,000) 100,000 Second quarter (5% x 1,500,000) 75,000 Thitd quarter (5% x 2,500,000) 125,000 B 'd debt expense for fourth quarter 137(HAPTER 11 yTERIM REPORTING problem {1-1 (AICPA Adapted) jan company had the following transactions during the first quarter: from typhoon 700,000 some of fire insurance premium for calendar year 100,000 “what total amount of expenses should be included in the income gatement forthe first quarter? ,, 800,000 4, 725,000 ¢, 200,000 rl 0 Solution 11-1 Answer b Loss from typhoon 700,000 Insurance expense (100,000 / 4) 25,000 Total expenses for first quarter 725,000 Under PAS 34, paragraph 28, the general rule in preparing interim financial statements is that cosis and expenses that clearly benefit more than one interim period are allocated to the interim periods affected. Thus, the insurance premium of P100,000 is allocated over four (uarterly interim periods. = and losses are not allocated over the interim periods. Thus, the ss from typhoon is reported in the quarter when incurred. 135