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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On Oct 1, 20X1, ABC Company acquired an equipment for P102,000. Estimated residual value is P2,000 with an estimated life of 4 years. ABC uses the sum-of-years' digit method. How much is the accumulated depreciation at Dec 31, 20X3?
am. 116.
None
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Depreciation by units-of-activity Method Prior to adjustment at the end of the year, the balance in Trucks is $424,500 and the balance in Accumulated Depreciation-Trucks is $128,900. Details of the subsidiary ledger are as follows: Accumulated Miles Estimated Estimated Depreciation Operated Truck Residual Useful at Beginning During No. Cost Value Life of Year Year $78,500 $11,775 240,000 miles 36,000 miles 119,000 14,280 310,000 $23,800 31,000 99,500 13,930 203,000 $79,600 20,300 127,500 15,300 320,000 $25,500 38,400 a. Determine for each truck the depreciation rate per mile and the amount to be credited to the accumutated depreciation section of each subsidiary account for the miles operated during the current year. Keep in mind that the depreciation taken cannot reduce the book value of the truck below its residual value. Round the rate per mile to two decimal places. Enter all values as positive amounts. Credit to Rate per Mile Miles Accumulated Truck No. (in cents) Operated…