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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Disclosures Obtain Kellogg’s 2017 annual report either using the “Investor Relations” portion of its website (do a web search for Kellogg’s investor relations) or go to http://www.sec.gov and click “Search for company filings” under “Filings and Forms (EDGAR).”

Required:

  1. 1. Did Kellogg’s report any accounting changes in its 2017 financial statements: If so, describe the reason for the change in principle and how Kellogg’s accounted for the change?
  2. 2. What was the financial statement impact of the change on net income, assets, liabilities, and equity?
  3. 3. What types of estimates did Kellogg’s discuss in its financial statements?

1.

To determine

Indicate whether Corporation K reported any changes in 2017, mention the reason for change in accounting principle, and the way Corporation K accounted for the change.

Explanation

Accounting changes: When a company requires to sacrifice the consistent accounting methods and procedures, to enhance the usefulness and relevance of the accounting information, those changes are referred to as accounting changes. Such inevitable accounting changes decrease the comparability and consistency of accounting information. The reasons for accounting changes could be new methods introduced by FASB (Financial Accounting Standards Board), changes in accounting principles, and changes in accounting estimates...

2.

To determine

Indicate the effect of the change in estimate on the net income, assets, liabilities, and shareholders’ equity of Corporation K.

3.

To determine

Indicate the types of estimates that Corporation K reported in its financial statements.

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