Carrboro Construction Company elected to change its method of accounting from the percentage-of-completion method to the completed-contract method. Prior-years income (cumulative) would have been $310,000 lower if Carrboro had always used the completed contract method. The company is subject to a 35% tax rate. Prepare the journal entry to record the change in method. (Record debits first, then credits. Exclude explanations from any journal entries.) Account ... Current Year
Q: 1. how much is the Net Income reported by the Branch? 2. how much is the True Income of the Branch?
A: Net income reported by branch is calculated as follows: Net income = Sales - ( opening inventory +…
Q: Bailey, Inc., is considering buying a new gang punch that would allow them to produce circuit boards…
A: Present worth of this investment :— It is the sum of all present value of future cash flows. It is…
Q: 1. Prepare a cost of production report, and identify the missing amounts for Work in…
A: Inventory in process, July 1 30000 Add: Received from materials storeroom 155000 Total units…
Q: Quiz Company produces four products from a common input. Joint costs to produce one batch total…
A: Physical units method In this method, the joint cost is allocated on the basis of physical units of…
Q: Swifty has a standard of 1.2 pounds of materials per unit, at $4 per pound. In producing 3000 units,…
A: Materials Variance :— Variance analysis direct material price variance is the difference between the…
Q: Selected comparative financial statements of Korbin Company follow. Comparative Income Statements…
A: Current Ratio :— It is the ratio of current assets to current liabilities. Common size…
Q: Audit sampling involves applying an audit procedure to less than 100 percent of the population for…
A: Sampling Risk :- Sampling threat is the opportunity that the objects decided on in a pattern…
Q: Donner Company is selling a piece of land adjacent to its business premises. An appraisal reported…
A: Cost concept :— Under cost concept, aquisition of assets or any other items should be recorded at…
Q: Calculate earnings per share. Earnings per share = $Answer b) Calculate the dividend yield.…
A: Earning per share :— It is the value of earnings available to equity shareholders per number of…
Q: During the current taxation year, KT Ltd., a Canadian-controlled private corporation located in Nova…
A:
Q: Compute the average days in inventory rounded to the nearest whole day based on the following data:…
A: Meaning : Average days in inventory means the number of days a company keeps its inventory before it…
Q: Complete the plant asset record for the following asset. The business used the asset for the entire…
A: As the depreciation method is straight line method, the depreciation is calculated as follows:…
Q: Consider the following perpetual system merchandising transactions of Belton Company. Use a separate…
A: Sale is the amount of money earned by an entity by selling goods or providing services, cost of…
Q: nstructions: The audit profession is considered one of the important professions for society due to…
A: The audit professional bodies play a critical role in society and the best way to understand their…
Q: During the most recent month, the company started and completed two jobs--Job B and Job K. There…
A: Pre Determined OH :— A predetermined overhead rate is an allocation rate that is used to apply the…
Q: Rusty, Inc. is the sole distributor of a computer product that sells for $50 per unit, and has a…
A: Marginal Costing - Marginal Costing is good method used to calculate cost of each additional unit…
Q: Required: Use the information in the adjusted trial balance to prepare (a) the income statement for…
A: Financial statements are those statements which are prepared at the end of the period. It includes…
Q: Myers Company uses a flexible budget for manufacturing overhead based on direct labor hours.…
A: Lets understand the basics. Flexible budget is prepared to calcualte the cost, sales and profit at…
Q: Cool Beans is a locally owned coffeeshop that competes with two large coffee chains, Planet Euro and…
A: Cost estimate seems to be important for every project or program in order to accomplish the project…
Q: A company has recently declared a dividend of 12p per share. The share price is £3.72 cum div and…
A: Price Earnings Ratio - Price earning Ratio shows the company's financial health of the company. This…
Q: Required: What is the cost per unit transferred to finished goods inventory for each of the three…
A: For Computing Cost of Production of the product, costs directly attributable, are directly charged…
Q: How about these questions: 1. how much is the Net Income (Loss) in 2021? 2. assuming the…
A: Lets understand the basics. For calculating requirement, we need to use below formula. Net income…
Q: During its hrst year of manufacturing costs: Direct materials, $5 per unit, Direct labor, $3 per…
A: Answer : Income under absorption Costing = Income under variable costing + Fixed overhead cost in…
Q: st basis of $30,000 and a fair value of $90,000. Fields is to receive an annuity of $6,000 each year…
A: Journal entries refer to those entries that involve the daily transactions or events of a company…
Q: Techcom is designing a new smartphone. Each unit of this new phone will require $248 of direct…
A:
Q: How much is the Continuing Franchise Fee Revenue to be recognized in 2021?
A: Given in the question: Royalty 5% Franchise Outlet opened May 1, 2021 Average…
Q: An entity is a dealer in equipment and uses leases to facilitate the sale of its product. The entity…
A: It has been given in the question that the equipment which has been provided by the dealer on the…
Q: Recommend THREE (3) audit procedures which can be performed to prevent external auditor's reliance…
A: The external auditor shall determine whether work of the internal audit function can be used for the…
Q: During May 2022, your company used $400 of cleaning supplies in the factory. When the use of these…
A: The work in process account records the total direct costs include during the production. The…
Q: On 6/2/Y3, Brad sold the car purchased in Y1 for $7,500. On 10/3/Y3, Brad sold the equipment…
A: Depreciation is the amount an asset loses in value over the usage of time. MACRS is a method of…
Q: Assume you made the following two predictions for 2022 for one of your production facilities: Total…
A: Predetermined Overhead Rate: At the beginning of the accounting period, a predefined overhead rate…
Q: Examples for the permanent differences between financial reporting and reporting for the IRS in…
A: Answer:- Financial reporting meaning:- The process for recording and communicating financial…
Q: Activity a b с e Predecessor a с b&c Duration (weeks) 2 3 3 4 5 Budget $ 300 200 250 650 420 Actual…
A: Answer - Step 1 - Calculation of Actual cost of work performed (ACWP) = 400+180+315+300+280 = $…
Q: What is the depreciation deduction, using 200% DB method, after year 2 for an asset that costs…
A: Lets understand the basics. 200% DB method is also known as double declining balance method. In this…
Q: Explain how activity-based costing differs from traditional costing systems. Imagine that your local…
A: How activity based costing differs from traditional costing? Answer Basis Traditional Costing…
Q: What is the financial analysis of each year?
A: It is given in the question only the liquidity ratios and on that basis only the financial analysis…
Q: From the above information, prepare a statement of activities for the year ended December 31, 2019.
A: Income statement: Income statement can be defined as one of the major financial statement that…
Q: Preble Company manufactures one product. Its variable manufacturing overhead is applied to…
A: Any organization, success's most important tool is a cost or revenue forecast. During the…
Q: Assume dividends tax at a rate of 20% A company has had two issues of Class B shares, which have no…
A: Dividend is Always declared on Face Value of the Share Face Value Per Share = R2 Computation of…
Q: Cute Company operates a branch in Baguio City. Selected balances taken from the books of Home Office…
A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: Prepare the absorption costing income statements that Sarah would have shown Jason for both years…
A: Income statement under absorption costing method is to be prepared for 2 years. Absorption costing…
Q: Select the necessary words from the list of possibilities to complete the following statements.…
A: Net income :— It is revenue minus expenses. Subsidiary ledger :— It is the list of accounts of…
Q: In 2022, the enacted tax rate is 25% for all current and future years, and Hynde Corp., in its first…
A: Deferred tax asset is like a prepaid tax the benefit of which will be received in future and a…
Q: B, C D are partners in a firm. Their Balance Sheet as on 31/12/2021 is as follows: Liabilities R.O…
A: Calculation of amount payable to the legal representative of C Particulars Amount (R.O) C's…
Q: Marine Components produces parts for airplanes and ships. The parts are produced to specification by…
A: A predefined overhead rate appears to be a rate used to allocate expected manufacturing costs…
Q: The present worth of a multiyear investment with all positive cash flows (incomes) other than the…
A: Minimum acceptable rate of return (MARR), is the minimum required rate of return or target rate that…
Q: Please answer all three sunbparts
A: Formula Contribution Margin Ratio = Net Profit Ratio/Margin of Safety Ratio Variable Ratio = 1 -…
Q: Exercise 13-10 (Algo) Part 3 [Alternate Version] (3-a) Compute times interest earned for the current…
A: The time interest earned ratio indicates the ability of the company to pay out its debt obligation…
Q: Milano Gallery purchases the copyright on a painting for $480,000 on January 1. The copyright is…
A: Copyright :— A copyright is the Legal Privileges given to Owner to Publish & Sell. Copyright…
Q: How much is the total amount credited to Installment Sales? 2. How much is the total realized gross…
A: Installment sales :— one of the regular payments that you make for something until you have paid the…
Step by step
Solved in 2 steps with 3 images
- Shannon Corporation began operations on January 1, 2019. Financial statements for the years ended December 31, 2019 and 2020, contained the following errors: In addition, on December 31, 2020, fully depreciated machinery was sold for 10,800 cash, but the sale was not recorded until 2021. There were no other errors during 2019 or 2020, and no corrections have been made for any of the errors. Refer to the information for Shannon Corporation above. Ignoring income taxes, what is the total effect of the errors on the amount of working capital (current assets minus current liabilities) at December 31, 2020? a. working capital overstated by 4,200 b. working capital understated by 5,800 c. working capital understated by 6,000 d. working capital understated by 9,800Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and taxable income for 2020. The prior period adjustment was the result of an error in calculating bad debt expense for 2019. The current tax rate is 30%, and no change in the tax rate has been enacted for future years. When the company applies intraperiod income tax allocation, the prior period adjustment will be shown on the: a. income statement at 12,000 b. income statement at 8,400 (net of 3,600 income taxes) c. retained earnings statement at 12,000 d. retained earnings statement at 8,400 (net of 3,600 income taxes)Trumpet and Trombone Manufacturing, Inc. began the year with a retained earnings balance of $545,000. The company had a great year and earned a net income of $190,000 this year and paid dividends of $14,000. Additionally, the companys controller determined that it had made an error when calculating tax expense in the preceding year, resulting in an understated expense amount of $22,000. What is the ending retained earnings balance?
- At the beginning of 2020, Buffalo Construction Company changed from the completed-contract method to recognizing revenue over time (percentage-of-completion) for financial reporting purposes. The company will continue to use the completed-contract method for tax purposes. For years prior to 2020, pretax income under the two methods was as follows: percentage-of-completion $100,000, and completed-contract $60,000. The tax rate is 20%.Prepare Buffalo’s 2020 journal entry to record the change in accounting principle. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)At the beginning of 2020, Wertz Construction Company changed from the completed-contract method to recognizing revenue over time (percentage-of-completion) for financial reporting purposes. The company will continue to use the completed-contract method for tax purposes. For years prior to 2020, pretax income under the two methods was as follows: percentage-of-completion $120,000, and completed-contract $80,000. The tax rate is 20%. Prepare Wertz's 2020 journal entry to record the change in accounting principle.On January 1, 2024, Hampton's Construction, Inc. decided to change from the completed-contract method of accounting to the percentage-of-completion method. Hampton will continue to use the completed-contract method for income tax purposes. The following information is available for net income. The income tax rate for all years is 35%.Net Income Year Ended Percentage of Completion Completed Contract December 31, 2022 $145,000 $125,000 December 31, 2023 179,000 159,000 December 31, 2024 267,000 181,000 What is the journal entry to record the change in accounting principle on January 1, 2024? Group of answer choices Retained Earnings 55,900 Deferred Tax Asset 30,100 Construction in Progress86,000 Construction in Progress 40,000 Retained Earnings 40,000 No entry needed. Construction in Progress 40,000 Deferred Tax Liability 14,000 Retained Earnings26,000
- Leni Company had a balance of P820,000 in the professional fees expense account on December 31, 2020, before considering year-end adjustments relating to the following: ➢Consultants were hired for a special project at a total fee not to exceed P650,000.The entity had recorded P550,000 of these fees based on building for work performed in 2020. ➢The attorney’s letter requested by the auditor dated Jan. 31, 2021, indicated that legal fees of P60,000 were billed on Jan. 15, 2021 for worked performed in Nov.2020, and the unbilled fees for Dec. 31, 2020 were P70,000. What amount should be reported as professional fees expense for the year ended December 31, 2020?At the beginning of 2020, Bramble Construction Company changed from the completed-contract method to recognizing revenue over time (percentage-of-completion) for financial reporting purposes. The company will continue to use the completed-contract method for tax purposes. For years prior to 2020, pretax income under the two methods was as follows: percentage-of-completion $114,200, and completed-contract $78,200. The tax rate is 40%. Bramble has a profit-sharing plan, which pays all employees a bonus at year-end based on 2% of pretax income.Compute the indirect effect of Bramble’s change in accounting principle that will be reported in the 2020 income statement, assuming that the profit-sharing contract explicitly requires adjustment for changes in income numbers. Indirect effect $enter the Indirect effect in dollarsFitzgerald Corp. reports pretax accounting income of $210,000, but because of a single temporary difference, taxable income is only $155,000. At the beginning of the year, no temporary differences existed. Fitzgerald is subject to a tax rate of 40%. Prepare the appropriate journal entry to record the company’s income tax expense for the year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Knowledge Check 02For its first year of operations, Marcus Corporation reported pretax accounting income of $274,800. However, because of a temporary difference in the amount of $19,200 relating to depreciation, taxable income is only $255,600. The tax rate is 39%. What amount should Marcus report as its deferred income tax liability in its balance sheet at the end of that year?
- Chanon, Inc. is a supplier of office equipments to the government. The company has recently delivered P2,000,000 worth of equipments but remains unpaid as of date. Yesterday, the company received a Final Assessment Notice from the Bureau of Internal Revenue for deficiency taxes and penalties amounting to P2,000,000. Can Chanon opt not to pay BIR? a. Yes, as the receivable and the tax liability can be set-off as the other party is also the government. b. No, as Chanon can still avail of its judicial remedies. c. Yes, as the claim against the government arose first. d. No, as Chanon's claim is a debt and the government's claim is taxes. These cannot be set-off.On January 1, 2021, Concretti Inc. had a division that met the criteria for discontinuance of a business component. For the period January 1 through October 15, 2021, the component had revenue of P500,000 and expenses of P800,000. The assets of the component were sold on October 15, 2021 at a loss of P100,000. How should Concretti report the component's operation for 2021?Euphoria Company had a balance of P820,000 in the professional fees expense account on December 31, 2020, before considering year-end adjustments relating to the following:➢ Consultants were hired for a special project at a total fee not to exceed P650,000. The entity had recorded P550,000 of these fees based on building for work performed in 2020.➢ The attorney’s letter requested by the auditor dated Jan. 31, 2021, indicated that legal fees of P60,000 were billed on Jan. 15, 2021 for worked performed in Nov. 2020, and the unbilled fees for Dec. 31, 2020 were P70,000.What amount should be reported as professional fees expense for the year ended December 31, 2020?