17. ABC Company provided the following net income and inventory: In 2019, net income using LIFO 2,750,000; year- end inventory using FIFO 1,400,000; YearOend inventory using LIFO 900,000; In 2020, Net Income using LIFO is 3,000,000; Year- end inventory using FIFO 2,000,000; Year-end inventory using LIFO is 1,600,000. What amount should be reported as net income for 2020 using the FIFO cost flow? * a. 2,900,000 b. 2,600,000 c. 3,500,000 O d. 3,100,000 18. On January 1, 2015, Honey Company purchased equipment for 4,000,000. The equipment has a useful life of 10 years and a residual value of 400,000. On January 1, 2019, the entity determined that the useful life of the equipment was 12 years from the date of acquisition and the residual value was 480,000. What is the carrying amount of the equipment on January 1, 2019? * a. 2,560,000 b. 2,920,000 O O d. 2,800,000 c. 2,400,000 19. Using the same information, what is the depreciation of the equipment for 2019? * O a. 175,000 O b. 260,000 O c. 300,000 O d. 360,000 20. After the issuance of the 2019 financial statements, Love Company discovered a computational error of 150,000 in the calculation of the December 31, 2019 inventory. The error resulted in a 150,000 overstatement in the cost of goods sold for the year ended Dec. 31, 2019. In Oct 2020, the entity paid the amount of 500,000 in settlement of litigation instituted against it during 2020. The income tax rate is 30%. In the financial statements for 2020, what is the adjustment of the retained earnings on January 1, 2020? * O a. 150,000 credit Ob. 350,000 debit O c. 245,000 debit O d. 105,000 credit 2 pun Company was sued by a competitor for 5,000,000 for infringement of a patent. Based on the advice of the legal counsel, the entity accrued the sum of 3,000,000 as a provision on Dec. 31, 2019. Subsequently, on March 15, 2020, the Supreme Court decided in favor of the party alleging infringement of the patent and ordered the defendant to pay the aggrieved party a sum of 3,500,000. The financial statements were prepared by management on Feb. 15, 2020 and approved by the board of directors on March 31, 2020. What amount should recognized as accrued liability on Dec. 31, 2019? * O a. 3,500,000 O b. 5,000,000 c. 1,500,000 22. Using the same information, what amount should be adjusted on Dec. 31, 2019 in relation to this event? O a. 1,500,000 O b. 1,000,000 O c. 500,000 O d.o 2 pur 23. Happy Company reported 2p the following transactions involving the officers: Contributions to retirement benefit plan 1,000,000; monthly salary 100,000; share options and other share based payments 500,000; trip to Japan for annual convention 300,000. What amount should be disclosed as related party disclosure? * a. 1,900,000 b. 1,600,000 c. 2,700,000 O d. 3,000,000 17. ABC Company provided the following net income and inventory: In 2019, net income using LIFO 2,750,000; year- end inventory using FIFO 1,400,000; YearOend inventory using LIFO 900,000; In 2020, Net Income using LIFO is 3,000,000; Year- end inventory using FIFO 2,000,000; Year-end inventory using LIFO is 1,600,000. What amount should be reported as net income for 2020 using the FIFO cost flow? * a. 2,900,000 b. 2,600,000 c. 3,500,000 O d. 3,100,000 18. On January 1, 2015, Honey Company purchased equipment for 4,000,000. The equipment has a useful life of 10 years and a residual value of 400,000. On January 1, 2019, the entity determined that the useful life of the equipment was 12 years from the date of acquisition and the residual value was 480,000. What is the carrying amount of the equipment on January 1, 2019? * a. 2,560,000 b. 2,920,000 O O d. 2,800,000 c. 2,400,000 19. Using the same information, what is the depreciation of the equipment for 2019? * O a. 175,000 O b. 260,000 O c. 300,000 O d. 360,000 20. After the issuance of the 2019 financial statements, Love Company discovered a computational error of 150,000 in the calculation of the December 31, 2019 inventory. The error resulted in a 150,000 overstatement in the cost of goods sold for the year ended Dec. 31, 2019. In Oct 2020, the entity paid the amount of 500,000 in settlement of litigation instituted against it during 2020. The income tax rate is 30%. In the financial statements for 2020, what is the adjustment of the retained earnings on January 1, 2020? * O a. 150,000 credit Ob. 350,000 debit O c. 245,000 debit O d. 105,000 credit 2 pun Company was sued by a competitor for 5,000,000 for infringement of a patent. Based on the advice of the legal counsel, the entity accrued the sum of 3,000,000 as a provision on Dec. 31, 2019. Subsequently, on March 15, 2020, the Supreme Court decided in favor of the party alleging infringement of the patent and ordered the defendant to pay the aggrieved party a sum of 3,500,000. The financial statements were prepared by management on Feb. 15, 2020 and approved by the board of directors on March 31, 2020. What amount should recognized as accrued liability on Dec. 31, 2019? * O a. 3,500,000 O b. 5,000,000 c. 1,500,000 22. Using the same information, what amount should be adjusted on Dec. 31, 2019 in relation to this event? O a. 1,500,000 O b. 1,000,000 O c. 500,000 O d.o 2 pur 23. Happy Company reported 2p the following transactions involving the officers: Contributions to retirement benefit plan 1,000,000; monthly salary 100,000; share options and other share based payments 500,000; trip to Japan for annual convention 300,000. What amount should be disclosed as related party disclosure? * a. 1,900,000 b. 1,600,000 c. 2,700,000 O d. 3,000,000 17. ABC Company provided the following net income and inventory: In 2019, net income using LIFO 2,750,000; year- end inventory using FIFO 1,400,000; YearOend inventory using LIFO 900,000; In 2020, Net Income using LIFO is 3,000,000; Year- end inventory using FIFO 2,000,000; Year-end inventory using LIFO is 1,600,000. What amount should be reported as net income for 2020 using the FIFO cost flow? * a. 2,900,000 b. 2,600,000 c. 3,500,000 O d. 3,100,000 18. On January 1, 2015, Honey Company purchased equipment for 4,000,000. The equipment has a useful life of 10 years and a residual value of 400,000. On January 1, 2019, the entity determined that the useful life of the equipment was 12 years from the date of acquisition and the residual value was 480,000. What is the carrying amount of the equipment on January 1, 2019? * a. 2,560,000 b. 2,920,000 O O d. 2,800,000 c. 2,400,000 19. Using the same information, what is the depreciation of the equipment for 2019? * O a. 175,000 O b. 260,000 O c. 300,000 O d. 360,000 20. After the issuance of the 2019 financial statements, Love Company discovered a computational error of 150,000 in the calculation of the December 31, 2019 inventory. The error resulted in a 150,000 overstatement in the cost of goods sold for the year ended Dec. 31, 2019. In Oct 2020, the entity paid the amount of 500,000 in settlement of litigation instituted against it during 2020. The income tax rate is 30%. In the financial statements for 2020, what is the adjustment of the retained earnings on January 1, 2020? * O a. 150,000 credit Ob. 350,000 debit O c. 245,000 debit O d. 105,000 credit 2 pun Company was sued by a competitor for 5,000,000 for infringement of a patent. Based on the advice of the legal counsel, the entity accrued the sum of 3,000,000 as a provision on Dec. 31, 2019. Subsequently, on March 15, 2020, the Supreme Court decided in favor of the party alleging infringement of the patent and ordered the defendant to pay the aggrieved party a sum of 3,500,000. The financial statements were prepared by management on Feb. 15, 2020 and approved by the board of directors on March 31, 2020. What amount should recognized as accrued liability on Dec. 31, 2019? * O a. 3,500,000 O b. 5,000,000 c. 1,500,000 22. Using the same information, what amount should be adjusted on Dec. 31, 2019 in relation to this event? O a. 1,500,000 O b. 1,000,000 O c. 500,000 O d.o 2 pur 23. Happy Company reported 2p the following transactions involving the officers: Contributions to retirement benefit plan 1,000,000; monthly salary 100,000; share options and other share based payments 500,000; trip to Japan for annual convention 300,000. What amount should be disclosed as related party disclosure? * a. 1,900,000 b. 1,600,000 c. 2,700,000 O d. 3,000,000