Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hi, Ma'am/Sir! Can someone help me to answer this questions? I need a computational and explanation on every question. Thank you! :> Doc, a public

Hi, Ma'am/Sir! Can someone help me to answer this questions? I need a computational and explanation on every question. Thank you! :>

image text in transcribed
Doc, a public limited company, has purchased inventory of 100,000. The company has offered the supplier a choice of settlement alternatives. The alternatives are either receiving 1.000 shares of Doc six months after the purchase date (valued at P110,000 at the date of purchase) or receiving a cash payment equal to the fair value of 800 shares as of December 31, 20X4 (estimated value P90,000 at the date of purchase). What should be the accounting entry at the date of purchase of the inventory? a. Inventory P90,000, liability P90,000. b. Inventory P100,000, liability P100,000. c. Inventory P100,000, liability P110,000, intangible asset P10,000. d. Inventory P100,000, liability P90,000, equity P10,000. (Adapted) 9. In the tax jurisdiction of Mack, a public limited company, a tax deduction is allowed for the intrinsic value of the share options issued to employees. The company issued options on January 1, 20X4, worth P15 million to employees. They vest in three years. The share options' intrinsic value at December 31, 20X4, was P12 million. The tax rate in the jurisdiction is 30%. What is the tax effect of the above issue of share options at December 31, 20X4? a. P1.5 million benefit to income statement. b. P1.2 million benefit to income statement. C. P1.5 million benefit recognized in equity. d. P1.2 million benefit recognized in equity. (Adapted) 10. In the above problem, what would be the tax effect if the intrinsic value at December 31, 20X4, was P21 million? a. P2.1 million tax benefit to income. b. P2.1 million recognized in equity. C. P1.5 million tax benefit to income, P0.6 million recognized in equity. d. P1.5 million recognized in equity, P0.6 million tax benefit to income. (Adapted)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting For Decision Making And Control

Authors: Jerold Zimmerman

10th Edition

1259969495, 978-1259969492

More Books

Students also viewed these Accounting questions

Question

Will other people benefit if I act according to this value?

Answered: 1 week ago