Hannam Co. decided to change from the declining-balance method of depreciation to the straight-line method effective 1 January 20X7. The following information was provided: Net Income as Reported $(31,800) 35,600 22,800 53,200 Excess of Declining-Balance Depreciation over straight- Line Depreciation $ 5,100 15,300 12,800 7,100 Year 20X3* 20X4 20X5 20X6 *First year of operations. The company has a 31 December year-end. The tax rate is 20%. No dividends were declared until 20X7; $10,300 of dividends were declared and paid in December 20X7. Income for 20X7, calculated using the new accounting policy, was $54,100. Required: Assuming that the change in policy was implemented retrospectively, present the retained earnings reconciliation that would appear in Hannam's 20X7 statement of changes in equity. (Negative amounts should be indicated by a minus sign.) Hannam Company Statement of Changes in Shareholder's Equity Retained Earnings Section Year Ended 31 December 20X7 Retained earnings, 1 January 20X7 Effect of change in accounting policy Retained earnings, 1 January as restated Retained earnings, 31 December 20x7 $ 0 0

Hannam Co. decided to change from the declining-balance method of depreciation to the straight-line method effective 1 January 20X7. The following information was provided: Net Income as Reported $(31,800) 35,600 22,800 53,200 Excess of Declining-Balance Depreciation over straight- Line Depreciation $ 5,100 15,300 12,800 7,100 Year 20X3* 20X4 20X5 20X6 *First year of operations. The company has a 31 December year-end. The tax rate is 20%. No dividends were declared until 20X7; $10,300 of dividends were declared and paid in December 20X7. Income for 20X7, calculated using the new accounting policy, was $54,100. Required: Assuming that the change in policy was implemented retrospectively, present the retained earnings reconciliation that would appear in Hannam's 20X7 statement of changes in equity. (Negative amounts should be indicated by a minus sign.) Hannam Company Statement of Changes in Shareholder's Equity Retained Earnings Section Year Ended 31 December 20X7 Retained earnings, 1 January 20X7 Effect of change in accounting policy Retained earnings, 1 January as restated Retained earnings, 31 December 20x7 $ 0 0

Name: Hannam Co. decided to change from the declining-balance method of dep
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Description: Hannam Co. decided to change from the declining-balance method of depreciation to the straight-linemethod effective 1 January 20X7. The following information was provided:Year20X3*20X420X520X6Net Income asReported$(31,800)35,60022,80053,200Excess of

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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An asset's book value is $36,000 on January 1, Year 6. The asset is being depreciated $500 per month using the straight-line method. Assuming the asset is sold on July 1, Year 7 for $25,000, the company should record: Multiple Choice O O O Neither a gain or loss is recognized on this type of transaction. A gain on sale of $2,000. A loss on sale of $1,000. A gain on sale of $1,000. A loss on sale of $2,000.
am. 116.
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34. Subject : - Accounting In 20X4, Fredup Inc. purchased a piece of equipment for $21,000. The equipment has a 7-year useful life and no residual value. The equipment was erroneously included as an expense in the year. The error was discovered in December 20X8. Required: Prepare the journal entry to record the adjustment in December 20X8. (Assume the company uses straight line depreciation, ignore taxes.)
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During the current year, Fortini Company disposed of three different assets. The company's accounts reflected the following on January 1 of the current years, prior to the disposal of the assets: Accumulated Depreciation (straight line) $15,750 (7 years) Original Residual Asset Machine A Machine B Machine C Cost $21,000 50,000 Value $3,000 4,000 75,000 3,000 Estimated Life 8 years 10 years 12 years 36,800 (8 years) 60,000 (10 years) The machines were disposed of in the following ways: a. Machine A: Sold on January 1 of the current year for $5,000 cash. b. Machine B. Sold on April 1 for $10,500; received cash, $2,500, and a note receivable for $8,000, due on March 31 of the following year, plus 6 percent interest. c. Machine C: Suffered irreparable damage from an accident on July 2. On July 10, a salvage company removed the machine at no cost. The machine was insured, and $18,000 cash was collected from the insurance company. Required: 1. Prepare all journal entries related to the…
subject; accounting
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