Accounting

Problem 3-12 (IFRS) Carla Company carried a provision of P2,000,000 in the draft financial statements for the year ended December 31, 2020 in relation to an unresolved court case. On January 31, 2021, when the financial statements for the year ended December 31, 2020 had not yet been authorized for issue, the case was settled and the court decided the final total damages to be paid by the entity at P3,000,000. What amount should be adjusted on December 31, 2020 in relation to this event? a. 3,000,000 b. 2,000,000 C . 1,000,000 d. 0 Problem 3-13 (IFRS) Pink Company is completing the preparation of the draft financial statements for the year ended December 31, 2020. The financial statements are authorized for issue on March 31, 2021. On January 31, 2021, a dividend of P2,000,000 was declared and a contractual profit share payment of P200,000 was made, both based on the profit for the year ended December 31, 2020. On February 15, 2021, a customer went into liquidation having owed the entity P900,000 for the past 5 months. No allowance had been made against this debt in the draft financial statements. On March 1, 2021, a manufacturing plant was destroyed by fire resulting in a financial loss of P2,500,000. What total amount should be recognized in profit or loss for the year ended December 31, 2020 to reflect adjusting events after the end of reporting period? a. 2,000,000 b. 3,600,000 c. 2,500,000 d. 1, 100,000 120