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INTERMEDIATE ACCOUNTING(LL)-W/2 ACCESS
9th Edition
ISBN: 9781260180657
Author: SPICELAND
Publisher: MCG
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Question
Chapter 20, Problem 20.17P
(1)
To determine
Rectification of errors
Once an accounting error is found, it should be properly rectified. The correction of accounting errors in a systematic manner is known as the rectification of errors.
To Prepare: A
(2)
To determine
To describe: The other steps GY Industries would take to appropriately report the situation.
(3)
To determine
To prepare: A journal entry for 2018,
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Students have asked these similar questions
A
Each of the following situations is independent:
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R.
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1
2
1. Change in estimated useful life and residualvalue. Company XYZ purchases equipment on 1 January 20x6 for
3
4
$
42,000 The company uses the straight line method of depreciation, taking a full year's depreciation in the year
5 of acquisition. The equipment has an estimated residual value of
$8,000.00 and an estimated useful life of
4 years. In 20x7, the company decides that the machine really has an origional total life of
5 years and
7 a residual value of
$ 7,000.00
8
9
How much is the depreciation expense for 20x7?
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11 Solution:
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18 2. Retrospective change in accounting policy. A private company changes its method of accounting for long term
19 construction contracts from the percentage of completion method (PC) to the compelted contract method (CC) in 20x7.
20 The years affected by the change, and incomes under both methods, appear below (ignore income tax)
21
22 Year
23 20x5
24…
LO 10.5
SHOW
ME HOW
McClain Company incurred the following expenditures during 2019:
The air conditioning system in the old manufacturing facility was replaced for $83,000. The old air conditioning system had a cost of $74,000 and a book value
of $2,000. The old air conditioning system had no scrap value.
Apr.
June
29
Annual maintenance of $38,000 was performed.
Sept.
12
The roof of the old manufacturing facility is replaced at a cost of $65,000. This expenditure substantially extended the life of the facility.
Dec.
28
A new wing was added to the manufacturing facility at a cost of $275,000. This expenditure substantially increased the productive capacity of the plant.
Required:
1. Prepare journal entries to record McClain's expenditures for 2019.
22
The cost of the wicketer machine is as follows:
Purchase Price
R70 000
Installation
R15 000
Staff Training
R6 500
The machine has a useful life of 10 years and management's policy is to revalue the machine
every two years from the date of purchase. The entity adopts the elimination method for
revaluations. The machine is depreciated on a straight-line basis.
An independent valuator who is a competent industry expert has determined the fair value of the
machine to be R90 000 on the 2nd anniversary of the purchase of the machine.
The Financial Director has also approved a policy that the revaluation surplus may be transferred
to retained earnings as the asset is used.
Required:
Show all current year journal entries in respect of the Wicketer Machine up until
the year ended 30 June 2022.
Journal Narrations are required.
Round all figures to the nearest Rand.
Q.1.2
Chapter 20 Solutions
INTERMEDIATE ACCOUNTING(LL)-W/2 ACCESS
Ch. 20 - Prob. 20.1QCh. 20 - There are three basic accounting approaches to...Ch. 20 - Prob. 20.3QCh. 20 - Lynch Corporation changes from the...Ch. 20 - Sugarbaker Designs Inc. changed from the FIFO...Ch. 20 - Most changes in accounting principles are recorded...Ch. 20 - Southeast Steel, Inc., changed from the FIFO...Ch. 20 - Prob. 20.8QCh. 20 - Its not easy sometimes to distinguish between a...Ch. 20 - For financial reporting, a reporting entity can be...
Ch. 20 - Prob. 20.11QCh. 20 - Describe the process of correcting an error when...Ch. 20 - Prob. 20.13QCh. 20 - If it is discovered that an extraordinary repair...Ch. 20 - Prob. 20.15QCh. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in inventory methods; average cost method...Ch. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in depreciation methods LO203 Irwin, Inc.,...Ch. 20 - Prob. 20.5BECh. 20 - Book royalties LO204 Three programmers at Feenix...Ch. 20 - Warranty expense LO204 In 2017, Quapau Products...Ch. 20 - Change in estimate; useful life of patent LO204...Ch. 20 - Prob. 20.9BECh. 20 - Error correction LO206 In 2018, internal auditors...Ch. 20 - Prob. 20.11BECh. 20 - Error correction LO206 In 2018, the internal...Ch. 20 - Change in principle; change in inventory methods ...Ch. 20 - Change in principle; change in inventory methods ...Ch. 20 - Change from the treasury stock method to retired...Ch. 20 - Change in principle; change to the equity method ...Ch. 20 - Prob. 20.5ECh. 20 - FASB codification research LO202 Access the FASB...Ch. 20 - Change in principle; change in inventory cost...Ch. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in depreciation methods LO203 For...Ch. 20 - Change in depreciation methods LO203 The Canliss...Ch. 20 - Book royalties LO204 Dreighton Engineering Group...Ch. 20 - Loss contingency LO204 The Commonwealth of...Ch. 20 - Warranty expense LO204 Woodmier Lawn Products...Ch. 20 - Prob. 20.15ECh. 20 - Accounting change LO204 The Peridot Company...Ch. 20 - Change in estimate; useful life and residual value...Ch. 20 - Classifying accounting changes LO201 through...Ch. 20 - Error correction; inventory error LO206 During...Ch. 20 - Error corrections; investment LO206 Required: 1....Ch. 20 - Prob. 20.21ECh. 20 - Prob. 20.22ECh. 20 - Prob. 20.23ECh. 20 - Inventory errors LO206 Indicate with the...Ch. 20 - Classifying accounting changes and errors LO201...Ch. 20 - Change in inventory costing methods; comparative...Ch. 20 - P 20-2 Change in principle; change in method of...Ch. 20 - Change in inventory costing methods; comparative...Ch. 20 - Change in inventory methods LO202 The Rockwell...Ch. 20 - Change in inventory methods LO202 Fantasy...Ch. 20 - Change in principle; change in depreciation...Ch. 20 - Depletion; change in estimate LO204 In 2018, the...Ch. 20 - Accounting changes; six situations LO201, LO203,...Ch. 20 - Prob. 20.9PCh. 20 - Inventory errors LO206 You have been hired as the...Ch. 20 - Error correction; change in depreciation method ...Ch. 20 - Accounting changes and error correction; seven...Ch. 20 - Prob. 20.13PCh. 20 - Prob. 20.14PCh. 20 - Prob. 20.15PCh. 20 - Prob. 20.16PCh. 20 - Prob. 20.17PCh. 20 - Integrating Case 201 Change to dollar-value LIFO ...Ch. 20 - Prob. 20.2BYPCh. 20 - Prob. 20.3BYPCh. 20 - Analysis Case 204 Change in inventory methods;...Ch. 20 - Prob. 20.5BYPCh. 20 - Prob. 20.6BYPCh. 20 - Analysis Case 208 Various changes LO201 through...Ch. 20 - Analysis Case 209 Various changes LO201 through...Ch. 20 - Prob. 20.10BYPCh. 20 - Prob. 20.11BYPCh. 20 - Prob. 20.12BYPCh. 20 - Prob. 1CCTC
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