Indicate with the appropriate letter the nature of each situation described below: Type of Change PR PP E Change in principle reported retrospectively Change in principle reported prospectively Change in estimate Change in estimate resulting from a change in principle Change in reporting entity EP R N Not an accounting change Situation 1. Change from declining balance depreciation to straight-line. 2. Change in the estimated useful life of office equipment. 3. Technological advance that renders worthless a patent with an unamortized cost of $45,000. 4. Change from determining lower of cost or net realizable value (LCNRV) for the inventories by the individual item approach to the aggregate approach. 5. Change from LIFO inventory costing to the weighted-average inventory costing. 6. Settling a lawsuit for less than the amount accrued previously as a loss contingency. 7. Including in the consolidated financial statements a subsidiary acquired several years earlier that was appropriately not included in previous years. 8. Change by a retail store from reporting warranty expense on a pay-as-you-go basis to estimating the expense in the period of sale. 9. A shift of certain manufacturing overhead costs to inventory that previously were expensed as incurred to more accurately measure cost of goods sold. (Either method is generally acceptable.) 10. Pension plan assets for a defined benefit pension plan achieving a rate of return in excess of the amount anticipated. Type of Change
Indicate with the appropriate letter the nature of each situation described below: Type of Change PR PP E Change in principle reported retrospectively Change in principle reported prospectively Change in estimate Change in estimate resulting from a change in principle Change in reporting entity EP R N Not an accounting change Situation 1. Change from declining balance depreciation to straight-line. 2. Change in the estimated useful life of office equipment. 3. Technological advance that renders worthless a patent with an unamortized cost of $45,000. 4. Change from determining lower of cost or net realizable value (LCNRV) for the inventories by the individual item approach to the aggregate approach. 5. Change from LIFO inventory costing to the weighted-average inventory costing. 6. Settling a lawsuit for less than the amount accrued previously as a loss contingency. 7. Including in the consolidated financial statements a subsidiary acquired several years earlier that was appropriately not included in previous years. 8. Change by a retail store from reporting warranty expense on a pay-as-you-go basis to estimating the expense in the period of sale. 9. A shift of certain manufacturing overhead costs to inventory that previously were expensed as incurred to more accurately measure cost of goods sold. (Either method is generally acceptable.) 10. Pension plan assets for a defined benefit pension plan achieving a rate of return in excess of the amount anticipated. Type of Change
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Indicate with the appropriate letter the nature of each situation described below:
Type of Change
PR
PP
E
Change in principle reported retrospectively
Change in principle reported prospectively
Change in estimate
Change in estimate resulting from a change in principle
Change in reporting entity
EP
R
N
Not an accounting change
Situation
1. Change from declining balance depreciation to straight-line.
2. Change in the estimated useful life of office equipment.
3. Technological advance that renders worthless a patent with an unamortized cost of $45,000.
4. Change from determining lower of cost or net realizable value (LCNRV) for the inventories by the individual item
approach to the aggregate approach.
5. Change from LIFO inventory costing to the weighted-average inventory costing.
6. Settling a lawsuit for less than the amount accrued previously as a loss contingency.
7. Including in the consolidated financial statements a subsidiary acquired several years earlier that was appropriately not
included in previous years.
8. Change by a retail store from reporting warranty expense on a pay-as-you-go basis to estimating the expense in the
period of sale.
9. A shift of certain manufacturing overhead costs to inventory that previously were expensed as incurred to more accurately
measure cost of goods sold. (Either method is generally acceptable.)
10. Pension plan assets for a defined benefit pension plan achieving a rate of return in excess of the amount anticipated.
Type of Change
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
Unlock instant AI solutions
Tap the button
to generate a solution
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