Problem 3-6 (IFRS) Ginger Company is completing the preparation of the financial statements for the year ended December 31, 2021. The financial statements are authorized for issue on March 31,2022. * On March 15, 2022, a dividend of P3,000,000 was declared and acontractual profit share payment of 1,000,000 was. made based on the profit for the year ended December 31, 2021. * OnFebruary 1,202, acustomer wentinto liquidation having owed the entity P500,000 for the past 5 months. No allowance had been made against this account in the financial statements. * OnMarch 20, 2022, a manufacturing plant was destroyed by fire resulting in a financial loss of P2,500,000. What total amount should be 7ecognized in profit or loss for 2021 to reflect adjusting events after the end of reporting period? a. 4,000,000 b. 3,000,000 c. 2,500,000 d. 1,500,000 Solution 3-6 Answer d Contractual profit share payment 1,000,000 Doubtful accounts expense 500,000 Total adjusting events 1,500,000 The dividend declaration is not recognized in profit or loss but a deduction from retained eamings dn March 15, 2022. The manufacturing plant destroyed by fire on March 20, 2022 isa nonadjusting event requiring disclosure only in the financial statements for 2021. The fire loss should be recognized in 2022. 47