INTERMEDIATE ACCOUNTING (LL) W/CONNECT
9th Edition
ISBN: 9781260679694
Author: SPICELAND
Publisher: MCG
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Chapter 20, Problem 20.10BE
Error correction
• LO20–6
In 2018, internal auditors discovered that PKE Displays, Inc., had debited an expense account for the $350,000 cost of a machine purchased on January 1, 2015. The machine’s useful life was expected to be five years with no residual value. Straight-line
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QUESTION THREE
Dr. Nii Moi Thompson has questioned Dr. Bawumia's analysis on the depreciation of the
cedi. "... He continued to say that in the example cited by Dr. Bawumia, "we seem to have
a case of crossed-wire analysis and its associated faulty conclusions. Dr. Bawumia in his
analysis said that at the end of December 2013 the cedi was GHC2.2 per US dollar. He
added that the Cedi is averaging some GHC 3.8 on the interbank and forex bureau markets
and that this represents a depreciation of over 40%."
Required: Comment on the magnitude of the depreciation of the cedi in the story
above and whether Bawumia's analysis is questionable?
a. AngloGold Ashanti is a global gold producer headquartered in Johannesburg, South Africa
with significant operations in Ghana.
Identify and discuss the types of exchange rate exposures that AngloGold Ashanti might face.
Use examples to illustrate how AngloGold Ashanti might face any of the exchange rate
exposures you identify.
FIN 6020
v20f
Taylor Toy Corp Ch 11 (11-9)
Taylor Toy Corp. is considering the replacement of it injection molding machine. It is 2 years old but new
technology has it considering the newest model.
The old (current) machine was acquired 2 years ago and is being depreciated on a straight line
basis over 8 years (6 years remaining).The annual depreciation expense is $350 per year, and its
current book value is $2,100. It can be sold for $2,500 today. If the machine is not replaced, it is
expected to be sold for $500 at the end of its remaining life (6 yrs).
The new, replacement machine will cost $8,000. It is expected to be used for 6 years, and is
expected to be sold for $800 then. It will be depreciated using MACRS (5-year class with 2 year
convention).
The new machine is expected to support an increase in sales by $1,000 per year, and with its
improved electrical efficiency, it should reduce operating expenses by $1,500 per year.
Inventories will need to increase by $2,000 and Account…
26.3X Harvey DaCosta, a sole trader, purchases on
1 November 2015 a new machine for $18,000.
His business year end is 31 October but he cannot
decide which method of depreciation he should use
in respect of the machine - the straight line method
or the reducing balance method.
Required:
In order to assist him in making his decision,
draw up the machine account, and provision for
depreciation account, for the three years from
1 November 2015, using:
(a) the straight line method
(b) the reducing balance method.
Each account must indicate which method is being
used and must be balanced at the end of each of the
three years.
Notes:
li) In both cases the rate of depreciation is to be
10%.
lii) Calculations should be made to the nearest $.
Chapter 20 Solutions
INTERMEDIATE ACCOUNTING (LL) W/CONNECT
Ch. 20 - Prob. 20.1QCh. 20 - There are three basic accounting approaches to...Ch. 20 - Prob. 20.3QCh. 20 - Lynch Corporation changes from the...Ch. 20 - Sugarbaker Designs Inc. changed from the FIFO...Ch. 20 - Most changes in accounting principles are recorded...Ch. 20 - Southeast Steel, Inc., changed from the FIFO...Ch. 20 - Prob. 20.8QCh. 20 - Its not easy sometimes to distinguish between a...Ch. 20 - For financial reporting, a reporting entity can be...
Ch. 20 - Prob. 20.11QCh. 20 - Describe the process of correcting an error when...Ch. 20 - Prob. 20.13QCh. 20 - If it is discovered that an extraordinary repair...Ch. 20 - Prob. 20.15QCh. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in inventory methods; average cost method...Ch. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in depreciation methods LO203 Irwin, Inc.,...Ch. 20 - Prob. 20.5BECh. 20 - Book royalties LO204 Three programmers at Feenix...Ch. 20 - Warranty expense LO204 In 2017, Quapau Products...Ch. 20 - Change in estimate; useful life of patent LO204...Ch. 20 - Prob. 20.9BECh. 20 - Error correction LO206 In 2018, internal auditors...Ch. 20 - Prob. 20.11BECh. 20 - Error correction LO206 In 2018, the internal...Ch. 20 - Change in principle; change in inventory methods ...Ch. 20 - Change in principle; change in inventory methods ...Ch. 20 - Change from the treasury stock method to retired...Ch. 20 - Change in principle; change to the equity method ...Ch. 20 - Prob. 20.5ECh. 20 - FASB codification research LO202 Access the FASB...Ch. 20 - Change in principle; change in inventory cost...Ch. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in depreciation methods LO203 For...Ch. 20 - Change in depreciation methods LO203 The Canliss...Ch. 20 - Book royalties LO204 Dreighton Engineering Group...Ch. 20 - Loss contingency LO204 The Commonwealth of...Ch. 20 - Warranty expense LO204 Woodmier Lawn Products...Ch. 20 - Prob. 20.15ECh. 20 - Accounting change LO204 The Peridot Company...Ch. 20 - Change in estimate; useful life and residual value...Ch. 20 - Classifying accounting changes LO201 through...Ch. 20 - Error correction; inventory error LO206 During...Ch. 20 - Error corrections; investment LO206 Required: 1....Ch. 20 - Prob. 20.21ECh. 20 - Prob. 20.22ECh. 20 - Prob. 20.23ECh. 20 - Inventory errors LO206 Indicate with the...Ch. 20 - Classifying accounting changes and errors LO201...Ch. 20 - Change in inventory costing methods; comparative...Ch. 20 - P 20-2 Change in principle; change in method of...Ch. 20 - Change in inventory costing methods; comparative...Ch. 20 - Change in inventory methods LO202 The Rockwell...Ch. 20 - Change in inventory methods LO202 Fantasy...Ch. 20 - Change in principle; change in depreciation...Ch. 20 - Depletion; change in estimate LO204 In 2018, the...Ch. 20 - Accounting changes; six situations LO201, LO203,...Ch. 20 - Prob. 20.9PCh. 20 - Inventory errors LO206 You have been hired as the...Ch. 20 - Error correction; change in depreciation method ...Ch. 20 - Accounting changes and error correction; seven...Ch. 20 - Prob. 20.13PCh. 20 - Prob. 20.14PCh. 20 - Prob. 20.15PCh. 20 - Prob. 20.16PCh. 20 - Prob. 20.17PCh. 20 - Integrating Case 201 Change to dollar-value LIFO ...Ch. 20 - Prob. 20.2BYPCh. 20 - Prob. 20.3BYPCh. 20 - Analysis Case 204 Change in inventory methods;...Ch. 20 - Prob. 20.5BYPCh. 20 - Prob. 20.6BYPCh. 20 - Analysis Case 208 Various changes LO201 through...Ch. 20 - Analysis Case 209 Various changes LO201 through...Ch. 20 - Prob. 20.10BYPCh. 20 - Prob. 20.11BYPCh. 20 - Prob. 20.12BYPCh. 20 - Prob. 1CCTC
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