1. Naruto Company granted 30,000 Share Appreciation Rights to one of its officers on January 1,...
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1. Naruto Company granted 30,000 Share Appreciation Rights to one of its officers on January 1, 2022. After a three-year service period, the employee is entitled to receivable cash equal to the appreciation in share price over the market value of the shares on the date of grant. The market price of the entity's shares are as follows: ● January 1, 2022-P300 December 31, 2022 - P315 ● December 31, 2023-P330 ● December 31, 2024 - P360 The officer exercised the rights on December 31, 2024. Required: a. Compute for the compensation expense to be reported in 2022 up to 2024 b. Provide the necessary journal entries. 2. On January 1, 2019, Madelle Corp. granted an employee an option to purchase 3,000 shares of Madelle's P5 par value ordinary shares at P20 per share. The option became exercisable on December 31,2020, after the employee completed two years of service. The market prices of Madelle's shares and share options are as follows: Date Jan. 1, 2019 Dec. 31, 2019 Dec. 31, 2020 Market price of share P30 50 45 Market price of share option P8 9 11 Required: Compute for the salaries expense in 2020. 3. The Delap Company accounts for non-current assets. On April 25, 2020, Delap classified a non- current asset as held for sale in accordance with PFRS5. At that date the asset's carrying amount was P32,000, its fair value was estimated at P22,000 and the costs to sell at P3,200. On May 15, 2020, the asset was sold for net proceeds of P17,400. Required: a. What amount should be included as an impairment loss? b. What amount should be included as loss on disposal? 4. On March 31, 2020, due to management decisions, a piece of equipment was reclassified as "Held for sale". The equipment was acquired on January 1, 2018 had an original cost of P5,000,000 with a 5- year useful life. On the same date the equipment had a fair value less cost to sell of P2,600,000. On July 31, 2020, the equipment has been sold for P2,300,000. Required: What amount of impairment loss was recognized in 2020? 5. In 2020, ABC Leathers Corp. runs two separate cash generating units, Boots segment and Wallet segment. On October 31, 2020, ABC agree and signed a contract to sell Wallet segment with sale completion and transfer of assets scheduled on January 31, 2021. The following information pertains to the two cash generating units of ABC on December 31, 2020: Wallet Segment Boot Segment 10,000,000 5,000,000 4,000,000 3,000,000 1,600,000 4,500,000 2,200,000 1,000,000 350,000 Total assets Total liabilities Fair value less cost to sell Sales Cost of sales Expenses Income tax 9,000,000 4,000,000 2,000,000 500,000 Required: a. Compute the amount of gain or loss from discontinued operations b. Prepare the income statement for 2020. 1. Naruto Company granted 30,000 Share Appreciation Rights to one of its officers on January 1, 2022. After a three-year service period, the employee is entitled to receivable cash equal to the appreciation in share price over the market value of the shares on the date of grant. The market price of the entity's shares are as follows: ● January 1, 2022-P300 December 31, 2022 - P315 ● December 31, 2023-P330 ● December 31, 2024 - P360 The officer exercised the rights on December 31, 2024. Required: a. Compute for the compensation expense to be reported in 2022 up to 2024 b. Provide the necessary journal entries. 2. On January 1, 2019, Madelle Corp. granted an employee an option to purchase 3,000 shares of Madelle's P5 par value ordinary shares at P20 per share. The option became exercisable on December 31,2020, after the employee completed two years of service. The market prices of Madelle's shares and share options are as follows: Date Jan. 1, 2019 Dec. 31, 2019 Dec. 31, 2020 Market price of share P30 50 45 Market price of share option P8 9 11 Required: Compute for the salaries expense in 2020. 3. The Delap Company accounts for non-current assets. On April 25, 2020, Delap classified a non- current asset as held for sale in accordance with PFRS5. At that date the asset's carrying amount was P32,000, its fair value was estimated at P22,000 and the costs to sell at P3,200. On May 15, 2020, the asset was sold for net proceeds of P17,400. Required: a. What amount should be included as an impairment loss? b. What amount should be included as loss on disposal? 4. On March 31, 2020, due to management decisions, a piece of equipment was reclassified as "Held for sale". The equipment was acquired on January 1, 2018 had an original cost of P5,000,000 with a 5- year useful life. On the same date the equipment had a fair value less cost to sell of P2,600,000. On July 31, 2020, the equipment has been sold for P2,300,000. Required: What amount of impairment loss was recognized in 2020? 5. In 2020, ABC Leathers Corp. runs two separate cash generating units, Boots segment and Wallet segment. On October 31, 2020, ABC agree and signed a contract to sell Wallet segment with sale completion and transfer of assets scheduled on January 31, 2021. The following information pertains to the two cash generating units of ABC on December 31, 2020: Wallet Segment Boot Segment 10,000,000 5,000,000 4,000,000 3,000,000 1,600,000 4,500,000 2,200,000 1,000,000 350,000 Total assets Total liabilities Fair value less cost to sell Sales Cost of sales Expenses Income tax 9,000,000 4,000,000 2,000,000 500,000 Required: a. Compute the amount of gain or loss from discontinued operations b. Prepare the income statement for 2020.
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Related Book For
Intermediate Accounting
ISBN: 978-0077400163
6th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
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