ACCT 320 Hinson 12-1 Week Twelve Practice Exercises

ACCT 320 Hinson 12-1 Week Twelve Practice Exercises - year...

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ACCT 320 Assignment 12-1 Week Twelve Practice Exercises Jamie Hinson November 23, 2008 E20-2 Inventory (FIFO) $1,116,000 Retained earnings $780,000 Deferred Tax (40%) $336,000 E20-4 1. E 2. R 3. EP 4. EP 5. PR 6. N 7. R 8. PP 9. EP 10. PP E20-6 1. Inventory (FIFO) $48,000,000 Retained earnings $48,000,000
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2. Make sure that the company uses FIFO from now on instead of the LIFO method of inventory. FIFO usually produces lower cost of goods sold and thus higher inventory than does LIFO. 3. According to our textbook, recall that a statement of shareholders’ equity reports changes that occur in each shareholder’s equity account starting with the beginning balances in the earlier
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Unformatted text preview: year reported. So, if retained earnings is one of the accounts whose balance requires adjustments due to a change in accounting principle, we must adjust the beginning balance of retained earnings for the earlier period reported in the comparative statements of shareholders’ equity. E20-9 According to our textbook, a change in depreciation methods is considered to be a change in accounting estimate that is achieved by a change in accounting principle. As a result, we account for such a change prospectively – precisely the way we account for changes in estimates....
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This note was uploaded on 09/08/2010 for the course ACCOUNTING 320 taught by Professor Hickman during the Spring '10 term at Heidelberg.

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ACCT 320 Hinson 12-1 Week Twelve Practice Exercises - year...

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