LP 3 chpt 4
LP3.1 Assignment: Text Problems
Chapter 4:
Q16
E4-4 (see Excel template)
E4-15
P4-1
P4-2 (see Excel template)
These homework problems are located in your Kieso textbook. Follow the instructions printed for each problem and submit solutions as one consolidated file. Students are to submit to instructor one MS Word or one Excel file per Learning Plan.
Q16:
a) The remaining balance of equipment should be depreciated over remaining 5yr period. The additional $425,000 depreciation is not a correction of error and is not shown as adjustment in retained earnings. It is considered a change in estimate.
b) Extraordinary item net of taxes in separate section in income statement, usually just before the net income.
c) Write off shown as expense or loss or separate section labeled as unusual, if unusual OR infrequent, not both. [Not as extraordinary item].
d) As long as not recorded previously, gain should be recognized in current period in computing net income.
e) Correction of error considered period adjustment and beginning balance of retained earnings reinstated, if material.
f) The cumulative effect of change report as an adjustment to beginning retained earnings. The prior years’ statements are recast on a basis consistent with the new standard.
E 4-4
a) Multiple-Step
Webster Company
Income Statement
For the Year Ended December 31, 2012
[In thousands, except Earnings Per Share]
Sale Revenues……………………………………………………………….....$96,500
Cost of Goods Sold……………………………………………..…………….…63,570
Gross Profit…………………………………………………………………...…32,930
Operating Expenses Selling Expenses Sales Commission..............................$7,980 Depreciation of Sales Equip…………6,480 Transportation-Out…………………..2,690 $17,150 Administration Expenses Officers’ Salaries…………………….4,900 Deprec. of Office Furn and Equip…...3,960 8,860 26,010
Income from
Chapter 4:
Q16
E4-4 (see Excel template)
E4-15
P4-1
P4-2 (see Excel template)
These homework problems are located in your Kieso textbook. Follow the instructions printed for each problem and submit solutions as one consolidated file. Students are to submit to instructor one MS Word or one Excel file per Learning Plan.
Q16:
a) The remaining balance of equipment should be depreciated over remaining 5yr period. The additional $425,000 depreciation is not a correction of error and is not shown as adjustment in retained earnings. It is considered a change in estimate.
b) Extraordinary item net of taxes in separate section in income statement, usually just before the net income.
c) Write off shown as expense or loss or separate section labeled as unusual, if unusual OR infrequent, not both. [Not as extraordinary item].
d) As long as not recorded previously, gain should be recognized in current period in computing net income.
e) Correction of error considered period adjustment and beginning balance of retained earnings reinstated, if material.
f) The cumulative effect of change report as an adjustment to beginning retained earnings. The prior years’ statements are recast on a basis consistent with the new standard.
E 4-4
a) Multiple-Step
Webster Company
Income Statement
For the Year Ended December 31, 2012
[In thousands, except Earnings Per Share]
Sale Revenues……………………………………………………………….....$96,500
Cost of Goods Sold……………………………………………..…………….…63,570
Gross Profit…………………………………………………………………...…32,930
Operating Expenses Selling Expenses Sales Commission..............................$7,980 Depreciation of Sales Equip…………6,480 Transportation-Out…………………..2,690 $17,150 Administration Expenses Officers’ Salaries…………………….4,900 Deprec. of Office Furn and Equip…...3,960 8,860 26,010
Income from