Answer
a No entry, changes in estimates are treated prospectively
b
Original cost 1,210,000.00
salvage value 10,000.00
Useful life 10
Depreciation/year 120,000.00
Depreciation/month 10,000.00
Accumulated depreciation at
the end of June 2017 760,000.00
Book value 450,000.00
New salvage value 8,000.00
Remaining depreciable basis 442,000.00
Remaining useful life 104 (180-76 month)
Depreciation/month 4,250.00
Journal
Depreciation Expense 85,500.00 (Jan-Jun depreciation 10,000/month and
Accum Depre 85,500.00
depreciation 10,000/month and Jul-Dec depreciation are 4,250/month)
Part a
1 Bad debt expense for 2012 should not have been reduced by €10,000. A change in the experience rate is considere
2 A change from Average Cost to FIFO is considered a change in accounting policy, which must be handled retrospecti
3 The inventory error in 2014 is a prior period adjustment and the 2014 and 2015 financial statements should be rest
Part b
Year 2012 2013 2014 2015
Unadjusted net income 140,000.00 160,000.00 205,000.00 276,000.00
Bad debt expense
adjustment (10,000.00)
Inventory Adjustment 15,000.00 5,000.00 10,000.00 (16,000.00)
Inventory
overstatement (14,000.00) 14,000.00
Adjusted net income 145,000.00 165,000.00 201,000.00 274,000.00
perience rate is considered a change in estimate, which should be handled prospectively
ust be handled retrospectively.
tatements should be restated.
a. Counter balance error is error that will be offset after two period while non counterbalanced error is erro that are not offset
The failure to record accrued wages is kind of counter balance error.
(i) company has not closed the book
Dec, 31 2017 Retained Earning 1000
Salaries Expense 1000
(ii) company has closed the book
No entry needed because already counter balance
a. Non adjusting event, karena perubahan kurs hanyalah peristiwa yang memberikan indikasi setelah tanggal pelaporan keu
b. Adjusting event, karena deklarasi kebangkrutan adalah peristiwa yang memberi bukti atas adanya kondisi setelah period
ETAP
tidak ada
Tidak menyusun
tidak ada
Tidak diperkenankan
Dibebankan
EMKM