Corporate Financial Accounting
14th Edition
ISBN: 9781305653535
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Question
Chapter 12, Problem 10DQ
To determine
Prior Period Adjustments
Prior period adjustments refer to the error that is caused due to any calculation error or from application of wrong accounting principles in any previous accounting year. Such errors are carried forward to the succeeding year to be adjusted without affecting the net income of the current period.
To Indicate: The method of reporting of the prior period adjustment on the current year financial statements.
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A prior period adjustment relates to the income of pastaccounting periods. Explain how such an item is shown inthe financial statements.
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prospective changes.
including the cumulative effect of the change in current period net income.
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Chapter 12 Solutions
Corporate Financial Accounting
Ch. 12 - Of two corporations organized at approximately the...Ch. 12 - A stockbroker advises a client to buy preferred...Ch. 12 - A corporation with both preferred stock and common...Ch. 12 - An owner of 2,500 shares of Simmons Company common...Ch. 12 - Prob. 5DQCh. 12 - Prob. 6DQCh. 12 - A corporation reacquires 60,000 shares of its own...Ch. 12 - The treasury stock in Discussion Question 7 is...Ch. 12 - Prob. 9DQCh. 12 - Prob. 10DQ
Ch. 12 - Prob. 12.1BECh. 12 - Prob. 12.2BECh. 12 - Entries for cash dividends The declaration,...Ch. 12 - Entries for stock dividends Alpine Energy...Ch. 12 - Prob. 12.5BECh. 12 - Reporting stockholders equity Using the following...Ch. 12 - Retained earnings statement Noric Cruises Inc....Ch. 12 - Dividends per share Seventy-Two Inc., a developer...Ch. 12 - Prob. 12.2EXCh. 12 - Entries for issuing par stock On January 22,...Ch. 12 - Prob. 12.4EXCh. 12 - Issuing stock for assets other than cash On...Ch. 12 - Selected stock transactions Alpha Sounds Corp., an...Ch. 12 - Issuing stock Willow Creek Nursery, with an...Ch. 12 - Issuing stock Professional Products Inc., a...Ch. 12 - Entries for cash dividends The declaration,...Ch. 12 - Entries for stock dividends Healthy Life Co. is an...Ch. 12 - Prob. 12.11EXCh. 12 - Effect of cash dividend and stock split Indicate...Ch. 12 - Selected dividend transactions, stock split...Ch. 12 - Prob. 12.14EXCh. 12 - Treasury stock transactions SprayCo Inc. develops...Ch. 12 - Prob. 12.16EXCh. 12 - Reporting paid-in capital The following accounts...Ch. 12 - Stockholders Equity section of balance sheet The...Ch. 12 - Stockholders Equity section of balance sheet...Ch. 12 - Retained earnings statement Sumter Pumps...Ch. 12 - Stockholders Equity section of balance sheet List...Ch. 12 - Prob. 12.22EXCh. 12 - Dividends on preferred and common stock Pecan...Ch. 12 - Prob. 12.2APRCh. 12 - Stock transactions for corporate expansion On...Ch. 12 - Entries for selected corporate transactions Morrow...Ch. 12 - Entries for selected corporate transactions...Ch. 12 - Prob. 12.1BPRCh. 12 - Stock transaction for corporate expansion Pulsar...Ch. 12 - Selected stock transactions Diamondback Welding ...Ch. 12 - Entries for selected corporate transactions Nav-Go...Ch. 12 - Entries for selected corporate transactions West...Ch. 12 - Selected transactions completed by Equinox...Ch. 12 - Prob. 12.1ADMCh. 12 - Prob. 12.2ADMCh. 12 - Prob. 12.3ADMCh. 12 - BBT and Regions Financial: Earnings per share BBT...Ch. 12 - Ethics In Action Tommy Gunn is a division manager...Ch. 12 - Prob. 12.3TIF
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Similar questions
- Describe the effect on the financial statements when an adjustment is prepared that records (a) unrecorded revenue and (b) unrecorded expense.arrow_forwardtrue or false? Gains and losses are allocated over the interim period in the preparation of interim financial reports.arrow_forwardcorrections of errors that occurred on a previous period’s financial statements are called?arrow_forward
- Choose the correct. Which of the following items must be disclosed in interim reports?a. Total assets.b. Total liabilities.c. Cash flow from operating activities.d. Gross revenues.arrow_forwardWhy does the recording of adjusting entries require a bet-ter understanding of the concepts of accrual accounting than does the recording of routine revenue and expense transac-tions occurring throughout the period?arrow_forwardChanges in accounting principles generally are reported as Group of answer choices A.adjustments to current period statements only. B.adjustments to current and/or prior period statements. C.extraordinary items. D.adjustments to prior period statements.arrow_forward
- How should a change in accounting estimate be recognized and disclosed in the financial statements?arrow_forwardPrepare adjusting entries for deferral of revenues.arrow_forwardRetrospective changes require all but which of the following? Group of answer choices adjustments to assets and liabilities to reflect the cumulative effect of the change on periods prior to those presented restatement of financial statements to reflect the effects of the change for each period presented detailed numerical comparisons of all prior periods to restated statements retained earnings restated for the cumulative effect of the change on income for periods prior to those presentedarrow_forward
- What is the impact of accrued expenses before year end adjusting entries ? The answer is .A. Understate expenses and understate liabilities. B. Understate assets and understate expenses . C. Overstate assets and understate expenses . D. Understate expenses and overstate liabilities.arrow_forwardIf it is impracticable to determine the cumulative effect of an accounting change to any of the prior periods, the accounting change should be accounted for a. as a cumulative effect change on the income statement b. as a prior period adjustment c. on a prospective basis d. as an adjustment to retained earningsarrow_forwardIn what respects is a review of interim financial information similar to a review of the unaudited annual financial statements of a nonissuer?arrow_forward
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