Compute for:  a. Retained Earning 2019 (Restated) b. Total Assets 2020 (Restated) c. Retained Earning 2020 ( REstated)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Compute for:  a. Retained Earning 2019 (Restated) b. Total Assets 2020 (Restated) c. Retained Earning 2020 ( REstated) d. Net Income- 2020 (Restated) e. Gain on Purchasing Power

Problem 1: ABC Company, an entity organized on January 1, 2018, provided the
following information:
2019
2020
Cash and cash equivalents
Inventory
Equipment, net
Land
3,000,000 4,250,000
2,200,000 3,000,000
1,500,000 1,400,000
4,500,000 4,500,000
1,500,000 2,000,000
6,000,000 6,500,000
3,000,000 3,000,000
700,000 1,650,000
8,000,000
2,200,000
5,200,000
3,000,000
1,700,000
100,000
500,000
350,000
Current liabilities (all monetary)
Noncurrent liabilities (all monetary)
Share capital
Retained earnings
Sales
Inventory, January 1
Purchases
Inventory, December 31
Operating expenses (excluding depreciation)
Depreciation
Income tax expense
Cash dividend paid on December 31, 2020
Additional information:
1. The pertinent index numbers are:
January 1, 2018 - 100
January 1, 2019 - 100
2. The land and equipment were acquired on January 1, 2018.
December 31, 2019 – 120
December 31, 2020 – 200
Required: If financial statements are restated using 2020 price level in accordance with
constant peso accounting, how much would be:
a. Retained earnings - 2019 (restated)
b. Total assets – 2020 (restated)
c. Retained earnings - 2020 (restated)
d. Net income – 2020 (restated)
e. Gain on purchasing power
Transcribed Image Text:Problem 1: ABC Company, an entity organized on January 1, 2018, provided the following information: 2019 2020 Cash and cash equivalents Inventory Equipment, net Land 3,000,000 4,250,000 2,200,000 3,000,000 1,500,000 1,400,000 4,500,000 4,500,000 1,500,000 2,000,000 6,000,000 6,500,000 3,000,000 3,000,000 700,000 1,650,000 8,000,000 2,200,000 5,200,000 3,000,000 1,700,000 100,000 500,000 350,000 Current liabilities (all monetary) Noncurrent liabilities (all monetary) Share capital Retained earnings Sales Inventory, January 1 Purchases Inventory, December 31 Operating expenses (excluding depreciation) Depreciation Income tax expense Cash dividend paid on December 31, 2020 Additional information: 1. The pertinent index numbers are: January 1, 2018 - 100 January 1, 2019 - 100 2. The land and equipment were acquired on January 1, 2018. December 31, 2019 – 120 December 31, 2020 – 200 Required: If financial statements are restated using 2020 price level in accordance with constant peso accounting, how much would be: a. Retained earnings - 2019 (restated) b. Total assets – 2020 (restated) c. Retained earnings - 2020 (restated) d. Net income – 2020 (restated) e. Gain on purchasing power
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