Name: Shania Rose P. Binwag Illustration 1

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Name: Shania Rose P.

Binwag
Illustration 1
1. Cash in bank 4,000,000
Accounts Receivable 8,000,000
Advances to employees 400,000
TOTAL MONETARY ASSETS 12,400,000

2. Inventory 3,000,000

Patent 2,000,000
Advances to suppliers 800,000
Financial asset at fair value 1,000,000
Prepaid Expenses 200,000
TOTAL NON-MONETARY ASSETS 7,000,000
Illustration 2
1. Accounts Payable 500,000
Accrued Expenses 250,000
Bonds Payable 1,500,000
Finance lease liability 2,000,000
TOTAL MONETARY LIABILITY 4,250,000

2. Unearned revenue 150,000


Advances from customers 600,000
Estimated Warranty Liability 100,000
Deferred tax liability 200,000
TOTAL NON-MONETARY LIABILITY 1,050,000

Illustration 3
1. What amount should be reported in a hyperinflationary statement of financial position for
Land?
Answer: 3,000,000
Solution: 1,200,000 x 300/120
2. What amount should be reported in a hyperinflationary statement of financial position for
Investment in long-term bonds?
Answer: 600,000
3. What amount should be reported in a hyperinflationary statement of financial position for
Long-term debt?
Answer: 800,000

Illustration 4
1. What is the amount of total assets after the restatement for hyperinflation?
Cash 175,000
Inventory (1,350,000 x 300/270)-300+240/2 1,500.000
PPE (450,000 x 300/150) 1500,000
TOTAL ASSETS 2,575,000

2. What is the amount of total liabilities after the restatement for hyperinflation?
Current Assets 350,000
Non- Current liabilities) 250,000
TOTAL LIABILITIES 600,000

3. What is the amount of share capital after the restatement for hyperinflation?
Answer: Share Capital= 600,000
Solution: 200,000 x 300/100

4. What is the balance of retained earnings after adjusting for hyperinflation?


Total Assets 2,575,000
Total Liabilities (600,000)
Total Shareholders’ equity 1,975,000
Share capital as restated (200,000 x 300/100) (600,000)
RETAINED EARNINGS 1,375,000

Illustration 5
Historical Fraction Restated
Sales=1.44 10,000,000 360/250=(140+360/2 14,400,000 (1)
)
Cost of goods 4,700,000 8,000,000 (2)
sold
Inventory-Jan 1 700,000 360/140 1,800,000
=2.57
Purchases =1.44 5,000,000 360/250 7,200,000
TGAS 5,700,000 9,000,000
Inventory- Dec (1,000,000) 360/360 (1,000,000)
31 =1.00
Gross income 5,300,000 6,400,000
Expenses 1.44 (4,000,000) 360/250 (5,760,000)
Depreciation 2.88 (4,000,000) 360/125 (11,520,000)
Total (8,000,000) (17,280,000)
Expenses
Net loss 2,700,000 10,880,000 (3)

Illustration 6
What is the gain or loss on purchasing power for the current year?
Monetary assets, Jan. 1 500,000
Monetary liabilities, Jan. 1 (200,000)
Non-monetary Assets 300,000 x 300/125 720,000
Increase in net monetary assets are restated 7,000,000
Total 7,720,000
Less: Decrease in monetary assets are restated (6,000,000)
Net monetary assets, end 1,720,000
Net monetary assets, end (unrestated) (1,400,000-600,000) (800,000)
LOSS ON PURCHASING POWER 920,000

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