INTERM.ACCT.:REPORTING...-CENGAGENOWV2
3rd Edition
ISBN: 9781337909358
Author: WAHLEN
Publisher: CENGAGE L
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Question
Chapter 22, Problem 1P
1.
To determine
Identify the type of accounting change, or error, represented in the given events.
2.
To determine
Indicate the method of accounting required to report the adjustment of changes, or errors.
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The board of directors of Oriole Construction Company is meeting to choose between the cost-recovery method and
the percentage-of-completion method of accounting for long-term contracts in the company's financial statements.
You have been engaged to assist Oriole's controller in the preparation of a presentation to be given at the board
meeting. The controller provides you with the following information:
1.
Oriole commenced doing business on January 1, 2024.
2.
Construction activities for the year ended December 31, 2024, were as follows:
Contract Costs
Estimated
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Incurred
Total
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Billings
Through
Cash Collections
to
Through
Through
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12/31/24
Project
Price
12/31/24
12/31/24
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A
$494,000
$334,000
$304,000
$418,000
$95,000
B
714,000
204,000
204,000
186,000
434,000
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472,000
469,000
384,000
344,000
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D
187,000
94,000
62,000
117,000
91,000
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394,000
394,000
314,000
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$1,348,000
$1,379,000
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3.
Each contract…
The board of directors of Oriole Construction Company is meeting to choose between the cost-recovery method and
the percentage-of-completion method of accounting for long-term contracts in the company's financial statements.
You have been engaged to assist Oriole's controller in the preparation of a presentation to be given at the board
meeting. The controller provides you with the following information:
1. Oriole commenced doing business on January 1, 2024.
2. Construction activities for the year ended December 31, 2024, were as follows:
3.
4.
(a)
Project
A
B
с
D
E
Total
Contract
Price
$494,000
714,000
472,000
187,000
444,000
$2,311,000
* Your answer is incorrect.
Billings
Through
12/31/24
$334,000
204,000
469,000
(1) The cost-recovery method.
94,000
394,000
$1,495,000
Cash Collections
Through
12/31/24
$304,000
204,000
384,000
62,000
394,000
$1,348,000
Contract Costs
Incurred
Through
12/31/24
Each contract is with a different customer.
Any work remaining to be done on the contracts is…
The board of directors of Ivanhoe Construction Company is meeting to choose between the cost-recovery method and the
percentage-of-completion method of accounting for long-term contracts in the company's financial statements. You have been
engaged to assist Ivanhoe's controller in the preparation of a presentation to be given at the board meeting. The controller provides
you with the following information:
1.
Ivanhoe commenced doing business on January 1, 2024.
2. Construction activities for the year ended December 31, 2024, were as follows:
Project
Total Contract
Price
Billings Through
12/31/24
Cash Collections
Through 12/31/24
Contract Costs
Incurred Through
Estimated
Additional Costs to
12/31/24
Complete Contract
A
$504,000
$344,000
$314,000
$428,000
$105,000
B
724,000
214,000
214,000
201,000
469,000
C
477,000
479,000
394,000
354,000
-0-
D
202,000
104,000
67,000
127,000
101,000
E
454,000
404,000
404,000
324,000
81,000
$2,361,000
$1,545,000
$1,393,000
$1,434,000
$756,000
3.
Each…
Chapter 22 Solutions
INTERM.ACCT.:REPORTING...-CENGAGENOWV2
Ch. 22 - Prob. 1GICh. 22 - Prob. 2GICh. 22 - Prob. 3GICh. 22 - What steps are necessary to apply the...Ch. 22 - Prob. 5GICh. 22 - Prob. 6GICh. 22 - Prob. 7GICh. 22 - Prob. 8GICh. 22 - Define a change in estimate. What is the proper...Ch. 22 - Prob. 10GI
Ch. 22 - How is a change in depreciation method accounted...Ch. 22 - Describe a change in a reporting entity. How does...Ch. 22 - Prob. 13GICh. 22 - Prob. 14GICh. 22 - Prob. 15GICh. 22 - Prob. 16GICh. 22 - Prob. 17GICh. 22 - Prob. 18GICh. 22 - Prob. 19GICh. 22 - Prob. 20GICh. 22 - The cumulative effect of an accounting change...Ch. 22 - When a change in accounting principle is made...Ch. 22 - Prob. 3MCCh. 22 - A change in the expected service life of an asset...Ch. 22 - During 2019, White Company determined that...Ch. 22 - Generally, how should a change in accounting...Ch. 22 - On January 2, 2017, Garr Company acquired...Ch. 22 - A company has included in its consolidated...Ch. 22 - Shannon Corporation began operations on January 1,...Ch. 22 - Shannon Corporation began operations on January 1,...Ch. 22 - Prob. 1RECh. 22 - Heller Company began operations in 2019 and used...Ch. 22 - Refer to RE22-2. Assume the pretax cumulative...Ch. 22 - Refer to RE22-2. Assume Heller Company had sales...Ch. 22 - Bloom Company had beginning unadjusted retained...Ch. 22 - Suppose that Blake Companys total pretax...Ch. 22 - Bliss Company owns an asset with an estimated life...Ch. 22 - At the end of 2019, Framber Company received 8,000...Ch. 22 - At the end of 2019, Cortex Company failed to...Ch. 22 - At the end of 2019, Jayrad Company paid 6,000 for...Ch. 22 - At the end of 2019, Manny Company recorded its...Ch. 22 - Abrat Company failed to accrue an allowance for...Ch. 22 - The following are independent events: a. Changed...Ch. 22 - Prob. 2ECh. 22 - The following are independent events: a. A...Ch. 22 - Change in Inventory Cost Flow Assumption At the...Ch. 22 - Fava Company began operations in 2018 and used the...Ch. 22 - Berg Company began operations on January 1, 2019,...Ch. 22 - Prob. 7ECh. 22 - In 2020, Frost Company, which began operations in...Ch. 22 - Gundrum Company purchased equipment on January 1,...Ch. 22 - Prob. 10ECh. 22 - On January 1, 2014, Klinefelter Company purchased...Ch. 22 - The following are independent errors made by a...Ch. 22 - The following are independent errors made by a...Ch. 22 - Refer to the information in E22-13. Required:...Ch. 22 - The following are independent errors: a. In...Ch. 22 - Dudley Company failed to recognize the following...Ch. 22 - Prob. 1PCh. 22 - Prob. 2PCh. 22 - Koopman Company began operations on January 1,...Ch. 22 - Schmidt Company began operations on January 1,...Ch. 22 - Prob. 5PCh. 22 - Kraft Manufacturing Company manufactures two...Ch. 22 - Jackson Company has decided to issue common stock...Ch. 22 - At the beginning of 2020, Holden Companys...Ch. 22 - At the end of 2020, while auditing Sandlin...Ch. 22 - At the beginning of 2020, Tanham Company...Ch. 22 - A review of Anderson Corporations books indicates...Ch. 22 - Prob. 12PCh. 22 - Gray Companys financial statements showed income...Ch. 22 - Prob. 14PCh. 22 - There are three types of accounting changes:...Ch. 22 - Prob. 2CCh. 22 - Berkeley Company, a manufacturer of many different...Ch. 22 - When the FASB issues a new generally accepted...Ch. 22 - It is important in accounting theory to be able to...Ch. 22 - Prob. 6CCh. 22 - Prob. 7CCh. 22 - Prob. 8CCh. 22 - Prob. 9CCh. 22 - Sometimes a business entity may change its method...
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