Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You get to know the following about the company Abzink AS: The operating profit is 300 in 2020. Ordinary profit before tax is 400 in

You get to know the following about the company Abzink AS:

The operating profit is 300 in 2020.
Ordinary profit before tax is 400 in 2020.
The annual result is 320 in 2020.
Total equity is 800 as of 31.12.2020.
The tax rate is 20 percent and there are no permanent or temporary differences.
As of 31 December 2019, the book value of the long-term equity investments was 100, while the fair value was  230.
As of 31 December 2020, the book value of the long-term equity investments was still 100, while the fair value was 200.
The company assesses its long-term equity investments in accordance with the cost method.
You have been commissioned to analyze the earnings and financial position of Abzink AS and you start by correcting the accounts for hidden reserves in the equity investments. Then enter the correct amounts in the fields below.
i) After the accounts have been adjusted for hidden reserves, the operating profit is in 2020?
ii) After the accounts have been adjusted for hidden reserves, ordinary profit before tax is in 2020?
iii) After the accounts have been adjusted for hidden reserves, the annual result in 2020?
iiii) After the accounts have been adjusted for hidden reserves, the equity as of 31 December 2020 is?

Step by Step Solution

3.37 Rating (163 Votes )

There are 3 Steps involved in it

Step: 1

i After the accounts have been adjusted for hidden reserves the operating profit is in 2020 The oper... 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

Intermediate Accounting

Authors: Donald E. Kieso, Jerry J. Weygandt, And Terry D. Warfield

13th Edition

9780470374948, 470423684, 470374942, 978-0470423684

More Books

Students also viewed these Accounting questions

Question

1. Let f(x) = 2x+6 if x Answered: 1 week ago

Answered: 1 week ago