Reference no: EM13912596
Change in Accounting Principles
Respond to the following. Submit journal entries in a table in MS Word and written segments in the same Word document. Do not submit two separate documents, as only one document can be accepted. For written answers, please make sure your responses are well written, formatted per the APA Requirements and have proper citations, if applicable.
Garner Company began operations on January 1, 2015, and uses the average cost method of pricing inventory. Management is contemplating a change in inventory methods for 2018. The following information is available for the years 2015-2017.
|
Net Income Computed Using
|
|
Average Cost Method
|
FIFO Method
|
LIFO Method
|
|
2015
|
$15,000
|
$20,000
|
$12,000
|
|
2016
|
18,000
|
24,000
|
14,000
|
|
2017
|
20,000
|
27,000
|
17,000
|
On January 1, 2017, Garner issued 10-year, $200,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 30 shares of Garner common stock. The company has had 10,000 common shares outstanding throughout its life. None of the bonds have been exercised as of the end of 2018. (Ignore tax effects.)
Use the link included at the bottom of this page to download the Excel Template containing the spreadsheet you will need for this exercise.
1. Using the spreadsheet Journal Entries, prepare the journal entry necessary to record a change from the average cost method to the FIFO method in 2018.
2. Assume Garner Company used the LIFO method instead of the average cost method during the years 2015-2017. In 2018, Garner changed to the FIFO method. Using the spreadsheet Journal Entries, prepare the journal entry necessary to record the change in accounting principle.
3. Assume Garner had the accounting change described in (2); Garner's income in 2018 was $30,000. Compute basic and diluted earnings per share for Garner Company for 2018. Show how income and EPS will be reported for 2018 and 2017.
|
Date
|
Account Title
|
Amount
|
Amount
|
|
Account Title
|
|
|
|
|
|
|
Provide a one line explanation for the reason why the journal entry has been made.
|
|
|
|
Date
|
Account Title
|
Amount
|
Amount
|
|
Account Title
|
|
|
|
|
|
|
Provide a one line explanation for the reason why the journal entry has been made.
|
|
|
|
Date
|
Account Title
|
Amount
|
Amount
|
|
Account Title
|
|
|
|
|
|
|
Provide a one line explanation for the reason why the journal entry has been made.
|
|
|
|
|
|
|
|
|
Date
|
Account Title
|
Amount
|
Amount
|
|
Account Title
|
|
|
|
|
|
|
Provide a one line explanation for the reason why the journal entry has been made.
|
|
|
|
Date
|
Account Title
|
Amount
|
Amount
|
|
Account Title
|
|
|
|
|
|
|
Provide a one line explanation for the reason why the journal entry has been made.
|
|
|
|
Date
|
Account Title
|
Amount
|
Amount
|
|
Account Title
|
|
|
|
|
|
|
Provide a one line explanation for the reason why the journal entry has been made.
|
|
|
|
|
|
|
|
|
Calculate the angle of inclination of the track
: A racing car of mass 1000kg moves around a banked track at a constant speed of 30ms. Assuming the total reaction at the wheels is normal to the track and the horizontal radius is 100m. Calculate the angle of inclination of the track to the horizon..
|
|
How much time can elapse in the given algorithm
: How much time can elapse in Algorithm 16.3 between a crash and its detection? Prove the eventual perfection of Algorithm 16.4. Is the re lation mep J.t eventually satisfied in every execution?
|
|
Find the speed of the mass
: A particular spring stretches 20 cm when a 500g mass is hung from it. Suppose a 2.0kg mass is attached to the string and it is displaced 40 cm from equilibrium position and released. Find the speed of the mass when x = 10 cm.
|
|
Find the tension in the string
: A ball of mass 50g tied to the end of a 50cm inextensible string is whirled around in a vertical circle. Find the tension in the string when the ball is at the top of the circle. Take g=10ms2.
|
|
Submit journal entries in a table in ms word
: Submit journal entries in a table in MS Word and written segments in the same Word document. Do not submit two separate documents, as only one document can be accepted
|
|
Variable and fixed overhead variances various issues
: Variable and fixed overhead variances various issues.
|
|
Orbital radius and speed of a synchronous
: What is the orbital radius and speed of a synchronous satellite which orbits the earth once every 24 hours. Take G = 6.67 x 10 raise to power -11 Nm/Kg2, mass of the earth is 5.98 x 10 raise to power 24kg.
|
|
Does it matter whether the transfer is to a c corporation
: You can use section 351 for asset protection by exchange your assets for stock in a corporation. That asset is no longer at risk to your personal creditors. Is this true? Does it matter whether the transfer is to a C Corporation or an S Corporatio..
|
|
Advise martin of the tax consequences
: Advise Martin of the tax consequences that will result to him on these facts. You need to consider both the 2012-2013 and 2013-2014 income years.
|