18th Edition

ISBN: 9781260714067

Author: SPICELAND

Publisher: MCG

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Textbook Question

Chapter 20, Problem 20.9BYP

Analysis Case 20–9

Various changes

• LO20–1 through LO20–4

Ray Solutions decided to make the following changes in its accounting policies on January 1, 2018:

a. Changed from the cash to the accrual basis of accounting for recognizing revenue on its service contracts.
b. Adopted straight-line depreciation for all future equipment purchases, but continued to use accelerated depreciation for all equipment acquired before 2018.
c. Changed from the LIFO inventory method to the FIFO inventory method.

Required:

For each accounting change Ray undertook, indicate the type of change and how Ray should report the change. Be specific.

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Chapter 20, Problem 20.8BYP

Chapter 20, Problem 20.10BYP

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Chapter 20 Solutions

GEN CMB(LL)INTRM ACCTG

Ch. 20 - Prob. 20.1Q Ch. 20 - There are three basic accounting approaches to...Ch. 20 - Prob. 20.3Q Ch. 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. 20.8Q Ch. 20 - Its not easy sometimes to distinguish between a...Ch. 20 - For financial reporting, a reporting entity can be...

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Solution Summary: The author explains the retrospective approach and prospective approach, where changes in accounting estimates are reflected in financial statements with effect from current and future periods.

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