Principal Company is a US based company that prepares its consolidated financial staterments in accordance with...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Principal Company is a US based company that prepares its consolidated financial staterments in accordance with US. GAAP Principat reported net income of $ 2.600O.000 in 2018 and stockhoiders equity of $12.000.000 at December 31, 2018. Principal wants to determine the reporting impact of switching to FRS. The following three items would create differences in financial reporting: At December 31 2018, management had detormined that a contingent iabitity was reasonably possible with regard to a defective product and Principal disciosed an amount of Se0.000 for this possibility. However, under IFRS, the likeihood of occurrence of an outtiow of resounces to settle the Sabitity was considered probable. ignore income tax) ZEPrincipal acquired a buildng at the beginning of 2016 at a cost of $5.000.000. The building has an estimated useful afe of 20 years, an estimated residual value of St000.000, and is being depreciated on a straight-ane basis. On January1, 2018. the building as a fair value of $5.500.000 Tere is no change in the estimated useful tife or residual value. In a switch to FRS, Principal would use the revaluation moodet in AS 16 to determine the carrying value of propertyr. plant, and equipment subsequent to acquistion 3 In 2018, Principal ncurred $O0,.000 of sesearch and development for a new product, of which 35% relates to development activities suibseguent to the point at which criteria indicating the creation of an intangibie asset had been met. As of the end of 2018. development of the new product had not been completed. Required: Prepareaschedule reconciting net income under US. GAAP to net income under IFRS for the year ended December 31 201s 2 Prepare aschedute reconcing stockholders equity under uS GAAP to stockholdes equity under IFRS at December 3n 20se Principal Company is a US based company that prepares its consolidated financial staterments in accordance with US. GAAP Principat reported net income of $ 2.600O.000 in 2018 and stockhoiders equity of $12.000.000 at December 31, 2018. Principal wants to determine the reporting impact of switching to FRS. The following three items would create differences in financial reporting: At December 31 2018, management had detormined that a contingent iabitity was reasonably possible with regard to a defective product and Principal disciosed an amount of Se0.000 for this possibility. However, under IFRS, the likeihood of occurrence of an outtiow of resounces to settle the Sabitity was considered probable. ignore income tax) ZEPrincipal acquired a buildng at the beginning of 2016 at a cost of $5.000.000. The building has an estimated useful afe of 20 years, an estimated residual value of St000.000, and is being depreciated on a straight-ane basis. On January1, 2018. the building as a fair value of $5.500.000 Tere is no change in the estimated useful tife or residual value. In a switch to FRS, Principal would use the revaluation moodet in AS 16 to determine the carrying value of propertyr. plant, and equipment subsequent to acquistion 3 In 2018, Principal ncurred $O0,.000 of sesearch and development for a new product, of which 35% relates to development activities suibseguent to the point at which criteria indicating the creation of an intangibie asset had been met. As of the end of 2018. development of the new product had not been completed. Required: Prepareaschedule reconciting net income under US. GAAP to net income under IFRS for the year ended December 31 201s 2 Prepare aschedute reconcing stockholders equity under uS GAAP to stockholdes equity under IFRS at December 3n 20se
Expert Answer:
Answer rating: 100% (QA)
Part 1 The schedule of reconciliation is as follows Net Income US GAAP 2600000 Inventory WriteDown 8... View the full answer
Related Book For
Advanced Financial Accounting
ISBN: 978-0078025624
10th edition
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker
Posted Date:
Students also viewed these general management questions
-
The preparation of financial statements in accordance with AASB standards is one of the most important government regulations imposed on many companies in Australia. According to Australian...
-
The U.S. parent company is preparing its consolidated financial statements for December 31, 20X4. The foreign companys local currency (LCU) is the functional currency. Information is presented in...
-
In 2012, Hollis Corporation reported net income of $1,000,000. It declared and paid preferred stock dividends of $250,000. During 2012, Hollis had a weighted average of 190,000 common shares...
-
Find the first derivatives. f(P) = P 3 + 3P 2 - 7P + 2
-
Using the Bohr formula for the energy levels, calculate the energy required to raise the electron in a hydrogen atom from n = 1 to n = . Express the result for 1 mol H atoms. Because the n = level...
-
Donna Donie, CFA, has a client who believes the common stock price of TRT Materials (currently $58 per share) could move substantially in either direction in reaction to an expected court decision...
-
Petitioner Christy Brzonkala met respondents Antonio Morrison and James Crawford at a campus party at Virginia Polytechnic Institute (Virginia Tech), where they were all students. At the party, the...
-
Enos Inc. is a construction company specializing in custom patios. The patios are constructed of concrete, brick, fiberglass, and lumber, depending upon customer preference. On June 1, 2010, the...
-
Centralized versus Decentralized Database Management Systems"Please respond to the following: Compare and contrast benefits and challenges that exist between centralized database management systems...
-
Willow has a salary of $30,000 and experienced the following: Loss from theft of securities $(5,000) Personal casualty gain 4,000 Personal casualty loss (3,000) The amount of Willow's deduction from...
-
Two key account balances at risk of material misstatement. For each account balance, the key assertion at risk. A justification as to why the account balances and assertions are at risk. An outline...
-
Which would you choose: selling illegal drugs at $75 an hour (20 percent chance per year of being arrested) or a $10-an-hour factory job? Why?
-
Some economists have argued against need-based scholarships because they work as an implicit tax on parents salaries and hence discourage saving for college. a. If the marginal tax rate parents face...
-
In 1997, a Dutch charity sponsored an incentive program in which teachers received prizes equal to about 30 percent of their salary if their students improved their scores on a standardized test. a....
-
If La Bella advertises its pizza online and demand increases, how will the number of pizzas sold change? How will the price of a pizza and La Bellas excess capacity change? Explain your answer....
-
The sex coefficient in Table \(\mathrm{S} 2\) is -2.437 . Which combination of the four \(\alpha\)-values in the previous exercise does this correspond to? MS Host 12 Aviary 290 Lineage 83 Residual...
-
The beam is supported by two rods AB and CD that have cross-sectional areas of 12 mm and 8 mm, respectively. Determine the position d of the 6-kN load so that the average nonmal stress in each rod is...
-
APC16550D UART has a clock running at18.432 MHz and its baud rate is set to 2000.Determine the HEX contents of its DLM and DLL registers. Please can you explain step by step and in detail how you get...
-
On January 1, 20X5, Pond Corporation purchased 75 percent of Skate Companys stock at underlying book value. At that date, the fair value of the noncontrolling interest was aJanuary 1, 20X8, and...
-
On January 1, 20X3, Guild Corporation reported total assets of $470,000, liabilities of $270,000, and stockholders equity of $200,000. At that date, Bristol Corporation reported total assets of...
-
The bookkeeper for the community of Spring Valley has asked for your assistance regarding the following items. Required Prepare a memo discussing the proper accounting and financial reporting in the...
-
Show, for a gas obeying the state equation \[p v=(1+\alpha) \Re T\] where \(\alpha\) is a function of temperature alone, that the specific heat at constant pressure is given by \[c_{p}=-\Re T...
-
An engine working on the constant volume (Otto) cycle has a compression ratio of 6.5 to 1 , and the compression follows the law \(p V^{1.3}=\mathrm{C}\), the initial pressure and temperature being 1...
-
The exhaust gases of a compression-ignition engine are to be used to drive an exhaust gas turbo-supercharger. Estimate the mean pressure ratio of expansion and the isentropic enthalpy drop per kmol...
Study smarter with the SolutionInn App