Explanation Accounting changes: When a company requires to sacrifice the consistent accounting methods and procedures, to enhance the usefulness and relevance of the accounting information, those changes are referred to as accounting changes. Such inevitable accounting changes decrease the comparability and consistency of accounting information. The reasons for accounting changes could be new methods introduced by FASB (Financial Accounting Standards Board), changes in accounting principles, and changes in accounting estimates. Accounting treatment of change in depreciation method: In the case of a change in depreciation method, the change in estimate depends on the estimated benefits out of the depreciation method applied, hence, cannot be concluded as to whether it is a change in accounting principle, or a change in accounting estimate. As per Generally Accepted Accounting Principles (GAAP) this change should be accounted for as a change in accounting estimate , and not as a change in accounting principle. A change in accounting estimate like the change in depreciation method, or change in service life of an asset, effects the values of the year in which the change is made, and future period only, but not the previous periods. Hence, the change in depreciation method is accounted for prospectively. Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically. Debit and credit rules: Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts. Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts. Prepare journal entry to record the change in service life of the equipment . Date Account Titles and Explanation Post Ref...

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Chapter 22 Solutions

Cengagenowv2, 1 Term Printed Access Card For Wahlen/jones/pagach’s Intermediate Accounting: Reporting And Analysis, 2017 Update, 2nd

Ch. 22 - Prob. 1GI Ch. 22 - Prob. 2GI Ch. 22 - Prob. 3GI Ch. 22 - What steps are necessary to apply the...Ch. 22 - Prob. 5GI Ch. 22 - Prob. 6GI Ch. 22 - Prob. 7GI Ch. 22 - Prob. 8GI Ch. 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. 13GI Ch. 22 - Prob. 14GI Ch. 22 - Prob. 15GI Ch. 22 - Prob. 16GI Ch. 22 - Prob. 17GI Ch. 22 - Prob. 18GI Ch. 22 - Prob. 19GI Ch. 22 - Prob. 20GI Ch. 22 - The cumulative effect of an accounting change...Ch. 22 - When a change in accounting principle is made...Ch. 22 - Prob. 3MC Ch. 22 - A change in the expected service life of an asset...Ch. 22 - Prob. 5MC Ch. 22 - Generally, how should a change in accounting...Ch. 22 - Prob. 7MC Ch. 22 - A company has included in its consolidated...Ch. 22 - Prob. 9MC Ch. 22 - Prob. 10MC Ch. 22 - Prob. 1RE Ch. 22 - Prob. 2RE Ch. 22 - Prob. 3RE Ch. 22 - Prob. 4RE 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 2016, Framber Company received 8,000...Ch. 22 - Prob. 9RE Ch. 22 - Prob. 10RE Ch. 22 - Prob. 11RE Ch. 22 - Prob. 12RE Ch. 22 - The following are independent events: a. Changed...Ch. 22 - Prob. 2E Ch. 22 - The following are independent events: a. A...Ch. 22 - Prob. 4E Ch. 22 - Prob. 5E Ch. 22 - Prob. 6E Ch. 22 - Prob. 7E Ch. 22 - Prob. 8E Ch. 22 - Prob. 9E Ch. 22 - Prob. 10E Ch. 22 - Prob. 11E 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 - Prob. 15E Ch. 22 - Prob. 16E Ch. 22 - Prob. 1P Ch. 22 - Prob. 2P Ch. 22 - Prob. 3P Ch. 22 - Prob. 4P Ch. 22 - Prob. 5P Ch. 22 - Prob. 6P Ch. 22 - Prob. 7P Ch. 22 - At the beginning of 2017, Holden Companys...Ch. 22 - Prob. 9P Ch. 22 - Prob. 10P Ch. 22 - Prob. 11P Ch. 22 - Prob. 12P Ch. 22 - Prob. 13P Ch. 22 - Prob. 14P Ch. 22 - There are three types of accounting changes:...Ch. 22 - Prob. 2C Ch. 22 - Prob. 3C 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. 6C Ch. 22 - Prob. 7C Ch. 22 - Prob. 8C Ch. 22 - Prob. 9C Ch. 22 - Prob. 10C

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Accounting Changes and Error Analysis: Intermediate Accounting Chapter 22; Author: Finally Learn;https://www.youtube.com/watch?v=c2uQdN53MV4;License: Standard Youtube License

Prepare journal entry to record the change in service life of the equipment.

Solution Summary: The author explains that accounting changes decrease the comparability and consistency of accounting information. Changes in depreciation methods affect the values of the year in which the change is made.

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Prepare journal entry to record the change in service life of the equipment.

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