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    Chapter 3 - Ia3

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    Xynith Nicole Ramos
    The document provides adjusting entries for events after the 2021 reporting period. On January 1, 2022, an entry is made to write off $3 million in doubtful accounts against allowance for doubtful accounts. On February 1, 2022, an entry records an additional $500,000 estimated liability for a lawsuit above the original $1 million estimated liability. The document also provides disclosure requirements for a nonadjusting event, where a $5 million shipping vessel was lost at sea on February 14, 2022, after the 2021 financial statements were authorized for issue on March 20, 2022.

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    Chapter 3 - Ia3

    Uploaded by

    Xynith Nicole Ramos
    110 views1 page
    The document provides adjusting entries for events after the 2021 reporting period. On January 1, 2022, an entry is made to write off $3 million in doubtful accounts against allowance for doubtful accounts. On February 1, 2022, an entry records an additional $500,000 estimated liability for a lawsuit above the original $1 million estimated liability. The document also provides disclosure requirements for a nonadjusting event, where a $5 million shipping vessel was lost at sea on February 14, 2022, after the 2021 financial statements were authorized for issue on March 20, 2022.

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    Chapter 3 answer valix

    Original Title

    CHAPTER 3 - IA3

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    The document provides adjusting entries for events after the 2021 reporting period. On January 1, 2022, an entry is made to write off $3 million in doubtful accounts against allowance for doubtful accounts. On February 1, 2022, an entry records an additional $500,000 estimated liability for a lawsuit above the original $1 million estimated liability. The document also provides disclosure requirements for a nonadjusting event, where a $5 million shipping vessel was lost at sea on February 14, 2022, after the 2021 financial statements were authorized for issue on March 20, 2022.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    110 views1 page

    Chapter 3 - Ia3

    Uploaded by

    Xynith Nicole Ramos
    The document provides adjusting entries for events after the 2021 reporting period. On January 1, 2022, an entry is made to write off $3 million in doubtful accounts against allowance for doubtful accounts. On February 1, 2022, an entry records an additional $500,000 estimated liability for a lawsuit above the original $1 million estimated liability. The document also provides disclosure requirements for a nonadjusting event, where a $5 million shipping vessel was lost at sea on February 14, 2022, after the 2021 financial statements were authorized for issue on March 20, 2022.

    Copyright:

    © All Rights Reserved
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    of 1

    CHAPTER 3: NOTES TO FINANCIAL STATEMENTS

    Problem 3 – 9
    Required 1: Prepare adjusting entries on December 31, 2021 to reflect the adjusting events after
    the reporting period
    2022
    Jan 1 Doubtful accounts P 3,000,000
    5
    Allowance for doubtful accounts P 3,000,000
    To write off accounts receivable

    Feb 1 Loss on lawsuit 500,000


    4
    Estimated liability 500,000
    To record increase in liability (1,500,000
    – 1,000,000)

    Required 2: Prepare the necessary disclosures to reflect the nonadjusting events after reporting
    period
    A shipping vessel of Caroline with carrying amount of P5,000,000 was completely lost at sea
    because of hurricane on February 14, 2022. The financial statement for 2021 were authorized for
    issue on March 20, 2022.
    There is no need to disclose the factory destroyed in the fire because the event occurred on
    March 25, 2022 which is after the issuance of the financial statements for 2021 on March 20,
    2022

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