Advanced Financial Accounting
12th Edition
ISBN: 9781259916977
Author: Christensen, Theodore E., COTTRELL, David M., Budd, Cassy
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 13, Problem 13.3.4E
To determine
Introduction: Interim reporting is made in between the fiscal year. It is made before the completion of fiscal year in mostly public corporation for taking various decisions for the remaining period. Mostly quarterly and half yearly report is prepared.
To choose: The correct answer.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Due to a decline in market price in the second quarter, an entity incurred an inventory loss. The market price is expected to return to previous level by the end of the year. At the end of the year, the decline had not reversed. When should the loss be reported in the interim income statement?
a. In the second quarter
b. In the fourth quarter
c. Ratably over the second, third, and fourth quarters
d. Ratable over the third and fourth quarters
The following pretax amounts pertain to Company for the year ended December 31, 2020:Sales –P800,000; Distribution and administrative costs –P84,000; Other income –P40,000; Interest expense –P4,000; Cost of goods sold –P480,000; Correction of prior period error (credit) –P16,000; Discontinued operations (debit) –P40,000; Cumulative effect of change in accounting policy (credit) –P28,000; Retained earnings, January 1 (not restated) –P160,000; Dividends declared –P12,000; Income tax rate is 30%. How much retained earnings would be shown on December 31, 2020 statement of financial position?
During 2022, Bamboo Inc. decided to change from FIFO method of inventory valuation to the weighted average method.
January 1 inventory under FIFO 7,100,000
January 1 inventory under weighted average 7,700,000
December 31 inventory under FIFO 7,900,000
December 31inventory under weighted average 8,300,000
In the statement of retained earnings for 2022, what amount should be reported as the pretax cumulative effect of this accounting change?A. 1,000,000 additionB. 1,000,000 deductionC. 600,000 additionD. 600,000 deduction
Chapter 13 Solutions
Advanced Financial Accounting
Ch. 13 - Prob. 13.1QCh. 13 - Prob. 13.2QCh. 13 - What are the three 10 percent significance tests...Ch. 13 - Prob. 13.4QCh. 13 - A company has 10 industry segments, of which the...Ch. 13 - Prob. 13.6QCh. 13 - Prob. 13.7QCh. 13 - Prob. 13.8QCh. 13 - Prob. 13.9QCh. 13 - Prob. 13.10Q
Ch. 13 - Prob. 13.11QCh. 13 - Prob. 13.12QCh. 13 - Prob. 13.13QCh. 13 - Prob. 13.14QCh. 13 - Maness Company made a change in accounting for its...Ch. 13 - Prob. 13.1CCh. 13 - Prob. 13.2CCh. 13 - Prob. 13.3CCh. 13 - Prob. 13.7CCh. 13 - Prob. 13.8CCh. 13 - Prob. 13.9CCh. 13 - Reportable Segments Data for the seven operating...Ch. 13 - Prob. 13.2.1ECh. 13 - Prob. 13.2.2ECh. 13 - Prob. 13.2.3ECh. 13 - Prob. 13.2.4ECh. 13 - Prob. 13.2.5ECh. 13 - Prob. 13.2.6ECh. 13 - Prob. 13.2.7ECh. 13 - Prob. 13.2.8ECh. 13 - Prob. 13.2.9ECh. 13 - Prob. 13.2.10ECh. 13 - Prob. 13.2.11ECh. 13 - Prob. 13.3.1ECh. 13 - Prob. 13.3.2ECh. 13 - Multiple-Choice Questions on Interim Reporting...Ch. 13 - Prob. 13.3.4ECh. 13 - Prob. 13.3.5ECh. 13 - Prob. 13.3.6ECh. 13 - Prob. 13.3.7ECh. 13 - Prob. 13.3.8ECh. 13 - Prob. 13.3.9ECh. 13 - Prob. 13.3.10ECh. 13 - LIFO Liquidation During July, Laesch Company,...Ch. 13 - Inventory Write-Down and Recovery Cub Company, a...Ch. 13 - MutiniedChoice Questions on Income Taxes at...Ch. 13 - Prob. 13.6.2ECh. 13 - Prob. 13.6.3ECh. 13 - MutiniedChoice Questions on Income Taxes at...Ch. 13 - Prob. 13.6.5ECh. 13 - Prob. 13.6.6ECh. 13 - Prob. 13.7ECh. 13 - Prob. 13.8ECh. 13 - Prob. 13.9ECh. 13 - Prob. 13.10ECh. 13 - Prob. 13.11ECh. 13 - Prob. 13.12ECh. 13 - Prob. 13.13PCh. 13 - Prob. 13.14PCh. 13 - Interim Income Statement Chris Inc. has...Ch. 13 - Prob. 13.17PCh. 13 - Prob. 13.20PCh. 13 - Matching Terms Match the items in the left-hand...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Rios Inc, uses International Financial Reporting Standards (IFRS). In 2018, Rios Inc. experienced a decline in the value of its inventory resulting in a write-down of its inventory from €240,000 to €200,000. The company used the loss method in 2018 to record the necessary adjustment and uses an allowance account to reduce inventory to NRV. In 2019, market conditions have improved dramatically and Rios, Inc.’s inventory increases to an NRV of €216,000. Which of the following will Rios, Increcord in 2019?arrow_forwardOn January 1, 2010, Roem Corp. changed its inventory method to FIFO from LIFO for both financial and income tax reporting purposes. The change resulted in a 500,000 increase in the January 1, 2010 inventory. Assume that the income tax rate for all years is30%. The cumulative effect of the accounting change should be reported by Roem in its 2010a. Retained earnings statement as a 350,000 addition to the beginning balance.b. Income statement as a 350,000 cumulative effect of accounting change.c. Retained earnings statement as a 500,000 addition to the beginning balance.d. Income statement as a 500,000 cumulative effect of accounting change.arrow_forward2. ABC Company experienced a decline in the value of its inventory in 2020 which resulted in a write-down from a cost of P2,400,000 to net realizable value of P1,650,000. The entity’s practice is to use the allowance method in recording necessary adjustments. In 2021, market conditions have improved and on December 31, 2021, the inventory had a cost of P4,200,000 and net realizable value of 3,750,000. Compute for the amount of gain on reversal of inventory write-down on December 31,2021.arrow_forward
- During year 3, Paul Company discovered that the ending inventories reported on its financial statements were incorrect by the following amounts: Year 1 - P 60,000 understated Year 2 - P 75,000 overstated Paul uses the periodic inventory system to ascertain year-end quantities that are converted to dollar amounts using the FIFO cost method. Prior to any adjustments for these errors and ignoring income taxes, Paul’s retained earnings at January 1, year 3, would be P 75,000 overstated P 135,000 overstated P 15,000 overstated Correctarrow_forwardWilma Company experienced a P500,000 decline in the market value of inventory at the end of the first quarter. The entity had expected this decline to reverse in the second quarter, and in fact, the second quarter recovery exceeded the previous decline by P100,000. What amount of gain or loss should be reported in the interim statements for the first and second quarters? ---------------- Choices: First quarter Second quarter a. 500,000 loss. 500,000 gain b. 500,000 loss 600,000 gain c. 500,000 loss 100,000 gain d. 0 0arrow_forwardOn December 31, 2020, Roseland Company experienced a decline in the value of inventory resulting in writedown from P4,000,000 cost to P3,500,000 net realizable value. The entity used the allowance method to record the necessary adjustment. In 2021, market conditions have improved dramatically. On December 31, 2021, the inventory had a cost of P5,000,000 and net realizable value of P4,800,000. The entity made purchases of P20,000,000 in 2021? What amount should be recognized as gain on reversal of inventory writedown in 2021? A 200,000 C. 500,000 B. 300,000 D. 0 What amount should be reported as cost of goods sold in 2021? A 19,000,000 C. 18,700,000 B. 19,300,000 D. 24,000,000arrow_forward
- At the beginning of current year, Black Company changed the inventory cost flow method to FIFO from weighted average method for both financial statement and income tax reporting purposes. The change resulted in a P600,000 increase in the beginning inventory. Ignoring income tax, the accounting change should be reported in the current year: a. Income statement as of P600,000 debit b. Retained earnings statement as a P600,000 debit adjustment to the beginning balance. c. Income statement as a P600,000 credit. d. Retained earnings statement as a P600,000 credit adjustment to the beginning balance.arrow_forwardHarvey Inc. is a calendar corporation. Its financial statements for the years 2021 and 2022 contained errors as follows: Year 2022 Year 2021 Inventory at year end 10,000 understated 30,000 overstated Depreciation expense 8,000 understated 25,000 overstated QUESTION: Assume that the proper correcting entries were made at December 31, 2021. By how much will 2022 income before income taxes be overstated or understated? ["", "", "", ""] Assume that no correcting entries were made at December 31, 2021. Ignoring income taxes, by how much will retained earnings at December 31, 2022 be overstated or understated? ["", "", "", ""] Assume that no correcting entries were made at December 31, 2021 or December 31, 2022, and that no additional errors occurred in 2023. Ignoring income taxes, by how much will working capital at December 31, 2023 be overstated or understated?arrow_forwardOn January 2, 2022, TITAN Company changed its inventory cost flow method to FIFO from average for both financial statements and income tax reporting purposes. The change resulted in a P800,000 increase in the beginning inventory on January 1, 2022. Ignoring income tax, the accounting change should preferably be reported by the company in its year 2022 as? A. ₱ 800,000 as debit adjustment to the beginning balance of retained earnings B. ₱ 800,000 credit to the income statement C. ₱ 800,000 debit to the income statement D. ₱ 800,000 as credit adjustment to the beginning balance of retained earningsarrow_forward
- Victor Manufacturing Co., switched from FIFO to LIFO on January 1, 2004 for external reporting and income tax purposes, while retaining FIFO for internal reports. On that date the FIFO inventory equaled $360,000. The ensuing three-year period resulted in the following; Date Inventory Year-End Costs Cost Index December 31, 2004 $438,000 1.05 December 31, 2005 460,000 1.25 December 31, 2006 520,000 1.35 The ending inventory at December 31, 2006, using the Dollar-value LIFO method would be a. $391,600 b. $402,000 c. $426,000 d. $386,444arrow_forwardBuster Corporation has the following items for the year ending December 31, 20XX. Retained earnings, balance, January 1 - $1,600,000; corrected an error that had understated the net income two years ago - 70,000; net income (current year) - 150,000; during the current year, Buster changed its inventory method from average cost to FIFO and the cumulative effect on prior years was to decrease beginning retained earnings - 21,000. Instructions: prepare in proper format the retained earnings statement.arrow_forwardAn inventory loss of P900,000 from decline in net realizable value occurred in April 2021. Chicken Wings Company recorded this loss in April 2021 after its March 31, 2021 quarterly report was issued. Of its loss, P200,000 was recovered by the end of the year. How should this loss and subsequent gain be reflected in the quarterly statements (1st, 2nd, 3rd and 4th, respectively) in profit(loss) of Jimin Company? a. P(225,000), P(225,000), P(225,000), P(225,000) b. P0, P(900,000), P0, P200,000 c. P0, P(300,000), P(300,000), P(300,000) d. P0, P(900,000), P0, P0arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
IAS 29 Financial Reporting in Hyperinflationary Economies: Summary 2021; Author: Silvia of CPDbox;https://www.youtube.com/watch?v=55luVuTYLY8;License: Standard Youtube License