Attached is a schedule of five proposed changes at the end of the year. ($ in 000s) Before theChange ProposedChange After theChange Net sales $ 18,800,000 (a) $200,000 $ 19,000,000 Cost of goods sold 13,200,000 (b) 400,000 13,600,000 Operating expenses 1,600,000 (c) (100,000) 1,500,000 Other revenue 500,000 (d) 50,000 550,000 Other expense 450,000 (e) (50,000) 400,000 Net income $ 4,050,000 $ 4,050,000 Required:1. Indicate whether each of the proposed changes is conservative, aggressive, or neutral.2. Indicate whether the total effect of all the changes is conservative, aggressive, or neutral.
Attached is a schedule of five proposed changes at the end of the year. ($ in 000s) Before theChange ProposedChange After theChange Net sales $ 18,800,000 (a) $200,000 $ 19,000,000 Cost of goods sold 13,200,000 (b) 400,000 13,600,000 Operating expenses 1,600,000 (c) (100,000) 1,500,000 Other revenue 500,000 (d) 50,000 550,000 Other expense 450,000 (e) (50,000) 400,000 Net income $ 4,050,000 $ 4,050,000 Required:1. Indicate whether each of the proposed changes is conservative, aggressive, or neutral.2. Indicate whether the total effect of all the changes is conservative, aggressive, or neutral.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Attached is a schedule of five proposed changes at the end of the year.
| ($ in 000s) | Before the Change |
Proposed Change |
After the Change |
| Net sales | $ 18,800,000 | (a) $200,000 | $ 19,000,000 |
| Cost of goods sold | 13,200,000 | (b) 400,000 | 13,600,000 |
| Operating expenses | 1,600,000 | (c) (100,000) | 1,500,000 |
| Other revenue | 500,000 | (d) 50,000 | 550,000 |
| Other expense | 450,000 | (e) (50,000) | 400,000 |
| Net income | $ 4,050,000 | $ 4,050,000 |
Required:
1. Indicate whether each of the proposed changes is conservative, aggressive, or neutral.
2. Indicate whether the total effect of all the changes is conservative, aggressive, or neutral.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education