Provide the 2021 entries to record the error correction

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Reference no: EM133207274

Problem:

Analyze each case and choose a letter code under each category to indicate the preferable accounting for each case (items b to f). Assume IFRS.

Type

Approach

P    = Policy

RWR = Retrospective with restatement

E    = Estimate

PNR = Prospective with no restatement

AE = Accounting error

 

  1. Changed the plant asset'sresidual value.           E, PNR            [Example]
  2. Switched from FIFO to averagecost to conform to parent company preferences. Opening balances for the current and previous two years can be reconstructed. 
  3. Discovered that a $400,000 acquisition of machinery two years ago had been debited to the land account.          
  4. Wrote off development cost accumulated and capitalized in two previousyears due to serious doubts about the project's viability.     
  5. Changed from an unacceptable accounting policy to an acceptable accounting policy.    __

Part B. Cardinal Limited purchased a delivery truck for $24,000 on January 1, 2019.  Cardinal expected to use the truck for only four years and then sell it for $4,000.  The accountant was instructed to use straight-line depreciation but neglected to record any depreciation in 2019 and 2020.  Rather, the accountant charged the entire cost to delivery expense in 2019. The company controller discovered the error late in 2021 (before adjusting and closing entries made). Assume a tax rate of 30%.

Required: Provide the 2021 entries to record the error correction and depreciation for  2021. 

2021

Debit 

Credit

To  record    the  error   correction  (tax effect included)  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

To   record   the  depreciation expense

 

 

 

 

 

 

 

 

Question #5

Part C. In  2020,  Eagle  Corp.,  a public company,  provided the following information:

  • Summarize the trend in the dividend growth rates.
    • Have the dividend growth rates increased or decreased? By how much? Has the increase or decrease been steady or varied from year to year?

Fiscal Year Ending

Dividend Per Share

Annual Growth Rate

June 2022

2.20

1.85%

June 2021

2.16

1.89%

June 2020

2.12

1.92%

June 2019

2.08

1.96%

June 2018

2.04

2%

June 2017

2.00

2.04%

June 2016

1.96

2.08%

June 2015

1.92

-

Reference no: EM133207274

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