Reference no: EM133055537

Question - Answer the following problems independently - On December 31, 2021, THESPIAN Co. has accounts payable of P2,000,000 before possible adjustment for the following:

a. Goods in transit from a vendor to THESPIAN on December 31, 2021, with an invoice cost of P100,000 and purchased FOB shipping point, was not yet recorded.

b. Goods shipped FOB shipping point from a vendor to THESPIAN was lost in transit. The invoice cost of P40,000 was not yet recorded.

c. Goods shipped FOB shipping point from a vendor to THESPIAN on December 31, 2021 amounting to P16,000 was recorded and included in the year-end physical count as "goods in transit."

d. Goods in transit from a vendor to THESPIAN on December 31, 2021 with an invoice cost of P20,000 purchased FOB destination was not yet recorded. The goods were received in January 2022.

e. Goods with invoice cost of P30,000 was recorded and included in the year-end physical count as "goods in transit." It was found out that the goods were shipped from a vendor under FOB destination.

f. Checks drawn but not yet released to payees amounted to P24,000 while checks drawn and released to payees but were postdated amounted to P10,000.

g. On December 28, 2021, a vendor authorized THESPIAN to return for full credit goods shipped and billed at P50,000 on December 14, 2021. THESPIAN shipped the returned goods on December 31, 2021 but the credit memo was received and recorded only on January 3, 2022.

h. Goods shipped FOB shipping point, freight prepaid from a vendor on December 28, 2021 was recorded at invoice cost at shipment date. The invoice cost is P28,000, while the freight cost is P6,000.

i. Goods shipped FOB destination, freight collect were received on December 29, 2021. The invoice cost of P80,000 was credited to accounts payable on date of receipt and the related freight of P10,000 was debited to an expense account.

A trunk owned and operated by NOVEMBER Company was involved in an accident with an auto driven by ABC on January 2, 2020. NOVEMBER Co. received notice on March 20, 2021 of a lawsuit for P 800 000 damages for a personal injury suffered by ABC. NOVEMBER's counsel believes it is reasonably possible that ABC will be successful against the company for an estimated amount in the range between P 100 000 and P 400 000. No amount within this range is a better estimate of potential damages than any other amount. It is expected that the lawsuit will be adjudicated in the latter part of 2022.

In May 2021, SIGMA Co. filed suit against Laila Inc. seeking P 850 000 damages for patent infringement. A court verdict in November awarded SIGMA P 600 000 in damages, but Laila's appeal is not expected to be decided before 2021. SIGMA's counsel believes it is probable but not virtually certain that SIGMA will be successful against Laila for an estimated amount in the range between P 300 000 and P 400 000 considered the most likely amount.

How much is the adjusted accounts payable of THESPIAN December 31, 2021?

What amount of loss should NOVEMBER accrue at December 31, 2021?

What amount should SIGMA record as a contingent asset from lawsuit in the year ended December 31, 2021?