As a certified public accountant, you have been contacted by Joe Davison, CEO of Sports-Pro Athletics, Inc., a manufacturer of a variety of athletic equipment. He has asked you how to account for the following changes. 1. Sports-Pro appropriately changed its depreciation method for its machinery from the double-declining-balance method to the units-of-production method effective January 1, 2020. 2. Effective January 1, 2020, Sports-Pro appropriately changed the salvage values used in computing depreciation for its office equipment. 3. On December 31, 2020, Sports-Pro appropriately changed the specific subsidiaries constituting the group of companies for which consolidated financial statements are presented. Instructions Write a 1–1.5 page letter to Joe Davison explaining how each of the above changes should be presented in the December 31, 2020, financial statements.
As a certified public accountant, you have been contacted by Joe Davison, CEO of Sports-Pro Athletics, Inc., a manufacturer of a variety of athletic equipment. He has asked you how to account for the following changes. 1. Sports-Pro appropriately changed its depreciation method for its machinery from the double-declining-balance method to the units-of-production method effective January 1, 2020. 2. Effective January 1, 2020, Sports-Pro appropriately changed the salvage values used in computing depreciation for its office equipment. 3. On December 31, 2020, Sports-Pro appropriately changed the specific subsidiaries constituting the group of companies for which consolidated financial statements are presented. Instructions Write a 1–1.5 page letter to Joe Davison explaining how each of the above changes should be presented in the December 31, 2020, financial statements.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
As a certified public accountant, you have been contacted by Joe Davison, CEO of Sports-Pro Athletics, Inc., a manufacturer of a variety of athletic equipment. He has asked you how to account for the following changes.
- 1. Sports-Pro appropriately changed its
depreciation method for its machinery from the double-declining-balance method to the units-of-production method effective January 1, 2020. - 2. Effective January 1, 2020, Sports-Pro appropriately changed the salvage values used in computing depreciation for its office equipment.
- 3. On December 31, 2020, Sports-Pro appropriately changed the specific subsidiaries constituting the group of companies for which consolidated financial statements are presented.
Instructions
Write a 1–1.5 page letter to Joe Davison explaining how each of the above changes should be presented in the December 31, 2020, financial statements.
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