Question 5 of 34 In the blank to the left of each question, fill in the letter from the following list which best describes the presentation of the item on the financial statements of Helton Corporation for 2011. Match each item to a choice In 2011, the company changed its method of recognizing income from the cost-recovery method to the percentage-of-completion method. After negotiations with the taxing authority, income taxes for 2009 were established at Php42,900. They were originally estimated to be Php28,600. Depreciation on a truck, acquired in 2008, was understated because the useful life had been overestimated. The understatement had been made in order to show higher net income in 2009 and 2010. In the current year, the company decides to change from expensing certain costs to capitalizing these costs, due to a change in the period benefited. The company switched from an average-cost to a FIFO inventory valuation method during the current year. In 2011, the company incurred interest expense of Php29,000 on a 20-year bond issue. During 2011, a long-term bond with a carrying value of Php3,600,000 was retired at a cost of Php4,100,000. At the end of 2011, an audit revealed that the corporation's allowance for doubtful accounts was too large and should be reduced to 2%. When the audit was made in 2010, the allowance seemed appropriate.
Question 5 of 34 In the blank to the left of each question, fill in the letter from the following list which best describes the presentation of the item on the financial statements of Helton Corporation for 2011. Match each item to a choice In 2011, the company changed its method of recognizing income from the cost-recovery method to the percentage-of-completion method. After negotiations with the taxing authority, income taxes for 2009 were established at Php42,900. They were originally estimated to be Php28,600. Depreciation on a truck, acquired in 2008, was understated because the useful life had been overestimated. The understatement had been made in order to show higher net income in 2009 and 2010. In the current year, the company decides to change from expensing certain costs to capitalizing these costs, due to a change in the period benefited. The company switched from an average-cost to a FIFO inventory valuation method during the current year. In 2011, the company incurred interest expense of Php29,000 on a 20-year bond issue. During 2011, a long-term bond with a carrying value of Php3,600,000 was retired at a cost of Php4,100,000. At the end of 2011, an audit revealed that the corporation's allowance for doubtful accounts was too large and should be reduced to 2%. When the audit was made in 2010, the allowance seemed appropriate.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Question 5 of 34
In the blank to the left of each question, fill in the letter from the following list which best describes the presentation of the item on the financial statements of Helton Corporation for 2011.
Match each item to a choice:
In 2011, the company changed its method of recognizing income from the cost-recovery
method to the percentage-of-completion method.
After negotiations with the taxing authority, income taxes for 2009 were established at
Php42,900. They were originally estimated to be Php28,600.
Depreciation on a truck, acquired in 2008, was understated because the useful life had been
overestimated. The understatement had been made in order to show higher net income in
2009 and 2010.
In the current year, the company decides to change from expensing certain costs to
capitalizing these costs, due to a change in the period benefited.
The company switched from an average-cost to a FIFO inventory valuation method during
the current year.
In 2011, the company incurred interest expense of Php29,000 on a 20-year bond issue.
During 2011, a long-term bond with a carrying value of Php3,600,000 was retired at a cost of
Php4,100,000.
At the end of 2011, an audit revealed that the corporation's allowance for doubtful accounts
was too large and should be reduced to 2%. When the audit was made in 2010, the
allowance seemed appropriate.
Choices:
Transcribed Image Text:At the end of 2011, an audit revealed that the corporation's allowance for doubtful accounts
was too large and should be reduced to 2%. When the audit was made in 2010, the
allowance seemed appropriate.
Choices:
Change in estimate
Change in estimate
Prior period adjustment (not due to change in principle)
< Previous
None of the above
Retrospective type accounting change with note
disclosure
Retrospective type accounting change with note
disclosure
Change in estimate
Change in estimate
# None of the above
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