Cooper Inc. took physical inventory count at the end of 2020. On the day of physical count, there are purchases that are still in transit. The shipping terms of those purchases in transit are FOB destination. As a result, theses purchases in transit were not included in the physical count. which of the following is correct? A. Cooper needs to correct an accounting error. B. Cooper has made a change in accounting principle, requiring retrospective adjustment. C.Cooper is required to adjust a change in accounting estimate prospectively. D. Cooper is not required to make any accounting adjustments. O A O B

Cooper Inc. took physical inventory count at the end of 2020. On the day of physical count, there are purchases that are still in transit. The shipping terms of those purchases in transit are FOB destination. As a result, theses purchases in transit were not included in the physical count. which of the following is correct? A. Cooper needs to correct an accounting error. B. Cooper has made a change in accounting principle, requiring retrospective adjustment. C.Cooper is required to adjust a change in accounting estimate prospectively. D. Cooper is not required to make any accounting adjustments. O A O B

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 11RE: At the end of 2019, Manny Company recorded its ending inventory at 350,000 based on a physical...

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Koopman Company began operations on January 1, 2018, and uses they FIFO inventory method for financial reporting and the average cost inventory method for income taxes. At the beginning of 2020, Koopman decided to switch to the average cost inventory method for financial reporting. It had previously reported the following financial statement information for 2019: An analysis of the accounting records discloses the following cost of goods sold under the FIFO and average cost inventory methods: There are no indirect effects of the change in inventory method. Revenues for 2020 total 130,000; operating expenses for 2020 total 30,000. Koopman is subject to a 21% income tax rate in all years; it pays the income taxes payable of a current year in the first quarter of the next year. Koopman had 10,000 shares of common stock outstanding during all years; it paid dividends of 1 per share in 2020. At the end of 2020, Koopman had cash of 10,000, inventory of 24,000, other assets of 70,800, accounts payable of 4,500, and income taxes payable of 6,000. It desires to show financial statements for the current year and previous year in its 2020 annual report. Required: 1. Prepare the journal entry to reflect the change in methods at the beginning of 2020. Show supporting calculations. 2. Prepare the 2020 financial statements. Notes to the financial statements are not necessary. Show supporting calculations.
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