Change in accounting principle: A change in accounting principle is said to be a change in a format used, like using different depreciation method or changing from FIFO to LIFO method of inventory valuation . Change in inventory methods: Change in inventory method is said to be the difference between the previous years ending inventory and the current years ending inventory. To Journalize: Entry at the beginning of 2016 to record the change in accounting principle of B Company.

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Answer 1

Question

Chapter 20, Problem 20.1E

(1)

To determine

Change in accounting principle:

A change in accounting principle is said to be a change in a format used, like using different depreciation method or changing from FIFO to LIFO method of inventory valuation.

Change in inventory methods:

Change in inventory method is said to be the difference between the previous years ending inventory and the current years ending inventory.

To Journalize: Entry at the beginning of 2016 to record the change in accounting principle of B Company.

(2)

To determine

To prepare: Comparative income statement for the year 2016-2015 of B Company

(3)

To determine

The balance in retained earnings of B Company reported previously using the FIFO method for the year 2015.

(4)

To determine

Balance in retained earnings that would include the comparative statements of retained earnings of B Company for the year 2016-2015.

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Joe transferred land worth $200,000, with a tax basis of $40,000, to JH Corporation, an existing entity, for 100 shares of its stock. JH Corporation has two other shareholders, Ethan and Young, each of whom holds 100 shares. With respect to the transfer:a. Joe has no recognized gain. b. JH Corporation has a basis of $160,000 in the land.c. Joe has a basis of $200,000 in his 100 shares in JH Corporation. d. Joe has a basis of $40,000 in his 100 shares in JH Corporation. e. None of the above.

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Answer 2

Question

Chapter 20, Problem 20.1E

(1)

To determine

Change in accounting principle:

A change in accounting principle is said to be a change in a format used, like using different depreciation method or changing from FIFO to LIFO method of inventory valuation.

Change in inventory methods:

Change in inventory method is said to be the difference between the previous years ending inventory and the current years ending inventory.

To Journalize: Entry at the beginning of 2016 to record the change in accounting principle of B Company.

(2)

To determine

To prepare: Comparative income statement for the year 2016-2015 of B Company

(3)

To determine

The balance in retained earnings of B Company reported previously using the FIFO method for the year 2015.

(4)

To determine

Balance in retained earnings that would include the comparative statements of retained earnings of B Company for the year 2016-2015.

Expert Solution & Answer

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Answer 3

Question

Chapter 20, Problem 20.1E

(1)

To determine

Change in accounting principle:

A change in accounting principle is said to be a change in a format used, like using different depreciation method or changing from FIFO to LIFO method of inventory valuation.

Change in inventory methods:

Change in inventory method is said to be the difference between the previous years ending inventory and the current years ending inventory.

To Journalize: Entry at the beginning of 2016 to record the change in accounting principle of B Company.

(2)

To determine

To prepare: Comparative income statement for the year 2016-2015 of B Company

(3)

To determine

The balance in retained earnings of B Company reported previously using the FIFO method for the year 2015.

(4)

To determine

Balance in retained earnings that would include the comparative statements of retained earnings of B Company for the year 2016-2015.

Expert Solution & Answer

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Answer 4

Question

Chapter 20, Problem 20.1E

(1)

To determine

Change in accounting principle:

A change in accounting principle is said to be a change in a format used, like using different depreciation method or changing from FIFO to LIFO method of inventory valuation.

Change in inventory methods:

Change in inventory method is said to be the difference between the previous years ending inventory and the current years ending inventory.

To Journalize: Entry at the beginning of 2016 to record the change in accounting principle of B Company.

(2)

To determine

To prepare: Comparative income statement for the year 2016-2015 of B Company

(3)

To determine

The balance in retained earnings of B Company reported previously using the FIFO method for the year 2015.

(4)

To determine

Balance in retained earnings that would include the comparative statements of retained earnings of B Company for the year 2016-2015.

Expert Solution & Answer

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Answer 5

Chapter 20, Problem 20.1E

(1)

To determine

Change in accounting principle:

A change in accounting principle is said to be a change in a format used, like using different depreciation method or changing from FIFO to LIFO method of inventory valuation.

Change in inventory methods:

Change in inventory method is said to be the difference between the previous years ending inventory and the current years ending inventory.

To Journalize: Entry at the beginning of 2016 to record the change in accounting principle of B Company.

(2)

To determine

To prepare: Comparative income statement for the year 2016-2015 of B Company

(3)

To determine

The balance in retained earnings of B Company reported previously using the FIFO method for the year 2015.

(4)

To determine

Balance in retained earnings that would include the comparative statements of retained earnings of B Company for the year 2016-2015.

Answer 6

Chapter 20, Problem 20.1E

(1)

To determine

Change in accounting principle:

A change in accounting principle is said to be a change in a format used, like using different depreciation method or changing from FIFO to LIFO method of inventory valuation.

Change in inventory methods:

Change in inventory method is said to be the difference between the previous years ending inventory and the current years ending inventory.

To Journalize: Entry at the beginning of 2016 to record the change in accounting principle of B Company.

Answer 7

Chapter 20, Problem 20.1E

(1)

To determine

Change in accounting principle:

A change in accounting principle is said to be a change in a format used, like using different depreciation method or changing from FIFO to LIFO method of inventory valuation.

Change in inventory methods:

Change in inventory method is said to be the difference between the previous years ending inventory and the current years ending inventory.

To Journalize: Entry at the beginning of 2016 to record the change in accounting principle of B Company.

Answer 8

(2)

To determine

To prepare: Comparative income statement for the year 2016-2015 of B Company

Answer 9

(2)

To determine

To prepare: Comparative income statement for the year 2016-2015 of B Company

Answer 10

(3)

To determine

The balance in retained earnings of B Company reported previously using the FIFO method for the year 2015.

Answer 11

(3)

To determine

The balance in retained earnings of B Company reported previously using the FIFO method for the year 2015.

Answer 12

(4)

To determine

Balance in retained earnings that would include the comparative statements of retained earnings of B Company for the year 2016-2015.

Answer 13

(4)

To determine

Balance in retained earnings that would include the comparative statements of retained earnings of B Company for the year 2016-2015.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 20 - Prob. 20.1Q Ch. 20 - Prob. 20.2Q Ch. 20 - Prob. 20.3Q Ch. 20 - Lynch Corporation changes from the...Ch. 20 - Prob. 20.5Q Ch. 20 - Most changes in accounting principles are recorded...Ch. 20 - Prob. 20.7Q Ch. 20 - Prob. 20.8Q Ch. 20 - Its not easy sometimes to distinguish between a...Ch. 20 - For financial reporting, a reporting entity can be...

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To prepare: Comparative income statement for the year 2016-2015 of B Company

The balance in retained earnings of B Company reported previously using the FIFO method for the year 2015.

Balance in retained earnings that would include the comparative statements of retained earnings of B Company for the year 2016-2015.

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Chapter 20 Solutions