Change in accounting policy does not include (a) Change in useful life from 10 years to 7 years. (b) Change of method of valuation of inventory from FIFO to weighted-average. (c) Change of method of valuation of inventory from weighted-average to FIFO. (d) Change from the practice (convention) of paying as Christmas bonus one month’s salary to staff before the end of the year to the new practice of paying one-half month’s salary only.

Change in accounting policy does not include (a) Change in useful life from 10 years to 7 years. (b) Change of method of valuation of inventory from FIFO to weighted-average. (c) Change of method of valuation of inventory from weighted-average to FIFO. (d) Change from the practice (convention) of paying as Christmas bonus one month’s salary to staff before the end of the year to the new practice of paying one-half month’s salary only.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter10: Inventory

Section: Chapter Questions

Problem 15EA: Shetland Company reported net income on the year-end financial statements of $125,000. However,...

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If Wakowski Companys ending inventory was actually $86,000 but was adjusted at year end to a balance of $68,000 in error, what would be the impact on the presentation of the balance sheet and income statement for the year that the error occurred, if any?
Shetland Company reported net income on the year-end financial statements of $125,000. However, errors in inventory were discovered after the reports were issued. If inventory was understated by $15,000, how much net income did the company actually earn?
The following accounts appear in the ledger of Sheldon Company on January 31, the end of this fiscal year. The data needed for adjustments on January 31 are as follows: ab.Merchandise inventory, January 31, 55,750. c.Insurance expired for the year, 1,285. d.Depreciation for the year, 5,482. e.Accrued wages on January 31, 1,556. f.Supplies used during the year 1,503. Required 1. Prepare a work sheet for the fiscal year ended January 31. Ignore this step if using QuickBooks or general ledger. 2. Prepare an income statement. 3. Prepare a statement of owners equity. No additional investments were made during the year. Ignore this step if using CLGL. 4. Prepare a balance sheet. 5. Journalize the adjusting entries. 6. Journalize the closing entries. Check Figure Net loss, 1,737
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 9,800
The following accounts appear in the ledger of Celso and Company as of June 30, the end of this fiscal year. The data needed for the adjustments on June 30 are as follows: ab.Merchandise inventory, June 30, 54,600. c.Insurance expired for the year, 475. d.Depreciation for the year, 4,380. e.Accrued wages on June 30, 1,492. f.Supplies on hand at the end of the year, 100. Required 1. Prepare a work sheet for the fiscal year ended June 30. Ignore this step if using CLGL. 2. Prepare an income statement. 3. Prepare a statement of owners equity. No additional investments were made during the year. 4. Prepare a balance sheet. 5. Journalize the adjusting entries. 6. Journalize the closing entries. 7. Journalize the reversing entry as of July 1, for the wages that were accrued in the June adjusting entry. Check Figure Net income, 14,066
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?
A review of Anderson Corporations books indicates that the errors and omissions pertaining to the balance sheet accounts shown as follows had not been corrected during the applicable years. The net income per the books is: 2017, 10,000; 2018, 12,000; 2019, 15,000; and 2020, 20,000. No dividends were declared during these years and no adjustments were made to retained earnings. The Retained Earnings balance on December 31, 2020, is 50,000. Omissions Required: Determine the correct net income for the years 2017, 2018, 2019, and 2020, and the adjusted balance sheet accounts as of December 31, 2020. Ignore possible income tax effects.
identify whether it is treated as a prior period adjustment or change in accounting estimate. Upon reviewing customer contracts, the company realizes it mistakenly reported $150,000 in revenue instead of the actual amount earned of $15,000. This mistake occurred two years ago and had a material effect on financial statements.
At the beginning of the year Candle Co. has an inventory balance of $32,000. The company has net income for the year of $56,000. Later, the accountant discovers an error that caused the beginning invenotory to be understated by $6,000. a. Assuming no other changes, what is the correct net income for the year? b. If the error was discovered after year-end, what was the effect of the error on the balance sheet? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Identify if the following changes are an accounting policy change (P), an accounting estimate change (AE), or an error (E). Item • The useful life of a piece of equipment was revised from five years to six years. • An accrued litigation liability was adjusted upwards once the lawsuit was concluded. • An item was missed in the year-end inventory count. • The method used to depreciate a factory machine was changed from straight-line to declining balance when it was determined that this better reflected the pattern of use. • A company adopted the new IFRS for revenue recognition. • The accrued pension liability was adjusted downwards as the company's actuary had not included one employee group when estimating the remaining service life. • The allowance for doubtful accounts was adjusted upwards due to current economic conditions. • The allowance for doubtful accounts was adjusted downwards because the previous estimate was based on an aged trial balance that classified some…
Dana Co.'s officers' compensation expense account had a balance of $224,000 at December 31, 20X4 before any appropriate year-end adjustment relating to the following:No salary accrual was made for December 30-31, 20X4. Salaries for the two-day period totaled $3,500.20X4 officers' bonuses of $62,500 were paid on January 31, 20X5.In its 20X4 income statement, what amount should Dana report as officers' compensation expense? $224,000 $290,000 $227,500 $286,500
At the end of the year, the following adjustments (a)–(j) need to be made: (a, b) Merchandise inventory as of December 31, $19,700.(c, d, e) Jones estimates that customers will be granted $400 in refunds of this year’s sales next year, and the merchandise expected to be returned will have a cost of $300.(f) Unused supplies on hand, $525.(g) Unexpired insurance on December 31, $1,000.(h) Depreciation expense on the building for the year, $800.(i) Depreciation expense on the store equipment for the year, $450.(j) Wages earned but not paid as of December 31, $330.journalise and post adjusting entries.