Reference no: EM131119161
Analysis of Various Accounting Changes and Errors Various types of accounting changes can affect the financial statements of a business enterprise differently. Assume that the following list describes changes that have a material effect on the financial statements for the current year of your business enterprise.
1. A change from the completed-contract method to the percentage-of-completion method of accounting for long-term construction-type contracts.
2. A change in the estimated useful life of previously recorded fixed assets as a result of newly acquired information.
3. A change from deferring and amortizing preproduction costs to recording such costs as an expense when incurred because future benefits of the costs have become doubtful. The new accounting method was adopted in recognition of the change in estimated future benefits.
4. A change from including the employer share of FICA taxes with payroll tax expenses to including it with "Retirement benefits" on the income statement.
5. Correction of a mathematical error in inventory pricing made in a prior period.
6. A change from presentation of statements of individual companies to presentation of consolidated statements.
7. A change in the method of accounting for leases for tax purposes to conform with the financial accounting method. As a result, both deferred and current taxes payable changed substantially.
8. A change from the FIFO method of inventory pricing to the LIFO method of inventory pricing. Identify the type of change that is described in each item above and indicate whether the prior year's financial statements should be retrospectively applied or restated when presented in comparative form with the current year's financial statements.
Differences upstream-downstream intercompany transfers
: Discuss the differences in upstream and downstream intercompany transfers. Why are they used and when are they used? What are the pros and cons of each method?
|
Effect of the change on the balance sheet
: Manner of reporting the change under current generally accepted accounting principles including a discussion, where applicable, of how amounts are computed.
|
Explain the six components or sources of return
: Explain the six components or sources of return for which proper analysis of an investment’s return must include. Discuss the implications of the following statement: “It’s not how much you earn on an investment, it’s how much you keep” Why?
|
How you think biographer-historian or social scientist
: Take a recent significant event (within the past ten years) and explain how you think a biographer, historian, or social scientist would describe the causes and consequences of the event (for example: the emergence of the European Union, the Timothy ..
|
Correction of a mathematical error in inventory pricing
: A change in the method of accounting for leases for tax purposes to conform with the financial accounting method. As a result, both deferred and current taxes payable changed substantially.
|
Prepare a balance sheet and income statement
: Prepare a balance sheet, an income statement, and a retained earnings statement for the Canadian subsidiary for Year 2 in U.S. dollars, assuming that the Canadian dollar is the functional currency.
|
True of leadership styles across cultures
: Which of the following is true of leadership styles across cultures?
|
What would be the proper adjustment to the december
: What would be the proper adjustment to the December 31, 2009, retained earnings?
|
Prepare a balance sheet an income statement
: Prepare a balance sheet, an income statement, and a retained earnings statement for the Canadian subsidiary for Year 1 in U.S. dollars assuming that the Canadian dollar is the functional currency. Include a separate schedule showing the computation o..
|