INTERMEDIATE ACCOUNTING(LL)-W/2 ACCESS
9th Edition
ISBN: 9781260180657
Author: SPICELAND
Publisher: MCG
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Chapter 20, Problem 20.19E
Error correction; inventory error
• LO20–6
During 2018, WMC Corporation discovered that its ending inventories reported on its financial statements were misstated by the following amounts:
| 2016 | understated by | $120,000 |
| 2017 | overstated by | 150,000 |
WMC uses the periodic inventory system and the FIFO cost method.
Required:
1. Determine the effect of these errors on
2. Prepare a
3. What other steps would be taken in connection with the error?
On December 12, 2018, an investment costing $80,000 was sold for $100,000. The total of the sale proceeds was credited to the investment account.
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2225
4 points
This is a multiple answer question.
Duncan Company miscounted its ending inventory during the December 31, 2025 physical count. Which items will be wrong on the 2025 franciaments assuming this
mistake is not discovered until the next year? (Choose all that apply).
OA Inventory
8. Liabilities
OC. Cost of goods sold
OD.Net income
OE. Noncurrent assets
Accounting for Correction of Errors, Change in Accounting Estimates
and Accounting Policies
Problem 1
CPA Co. has been using the FIFO method of inventory costing since it began operations in 2019. In
2020, the company decided to change to the weighted average method. The following are the December
31 inventory balances under each method:
2019
2020
FIFO
P450,000
895,000
Weighted Average
P560,000
999,000
_1. What is the cumulative effect of this accounting change in the January 1, 2020
Retained Earnings as a result of the accounting change? (Income tax rate is 30%) Indicate whether debit
or credit.
13
Mactan Company’s statements for 2018 and 2019 included the following errors:
12/31/18 inventory understated
P2,000,000
12/31/19 inventory overstated
1,000,000
Depreciation for 2018 understated
400,000
Depreciation for 2019 overstated
800,000
How much should retained earnings be retroactively adjusted on January 1, 2020?
Group of answer choices
1,400,000 decrease
600,000 increase
600,000 decrease
1,400,000 increase
Chapter 20 Solutions
INTERMEDIATE ACCOUNTING(LL)-W/2 ACCESS
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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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