Tara-Anderson-week 7 excel assignment

# Tara-Anderson-week 7 excel assignment - 2042 1 Tara...

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20–42 Tara Anderson 1 Computation of FIFO Net Income 2008 LIFO net income 200,000 Plus after-tax income effect from: decrease in FIFO cost of goods sold 30,000 FIFO net income 230,000 All Seasons Company Comparative Statements of Retained Earnings For the Years Ended December 31, 2008, 2007, and 2006 2008 Beginning retained earnings 640,800 Add adjustment for increase in income before 2006 stemming from change to FIFO 0 Adjusted retained earnings 640,800 Add FIFO net income 230,000 Deduct dividends 0 Ending retained earnings 870,800 The note disclosure includes line-by-line comparisons for each year reported (2006, 2007, and 2008) for each financial statement. In order to prepare this note disclosure, the financial statement preparer needs to know balance sheet, income statement, and statement of cash flows data for both LIFO and FIFO for all three years.

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2007 2006 130,000 140,000 14,400 13,200 144,400 153,200 2007 2006 496,400 300,000 0 43,200 496,400 300,000 144,400 153,200 0 0 640,800 496,400
20–43 Tara Anderson Depreciation expense for 2007 is computed as ?: Please com \$ Book value on Dec. 31, 2007 is computed as ? Please com \$ Please com 100 20–43 (Concluded) Debit Depreciation Expense 12,000 Accumulated Depreciation—Computers Because the change involves a revision in the estimated useful life, the change is handled prospectively. The book value at the end of 2007 is \$72,000 computed as follows? With the revised estimated useful life, the new double- declining-balance percentage is computed as follows ? Thus, the appropriate percentage to apply to the book value in calculating depreciation expense is 100%. Recall that the limitation on the declining-balance methods is that depreciation is not taken once the book value is equal to the residual value. The entry to record depreciation expense for 2008 is \$72,000 × 100% = \$72,000. However, depreciation should not result in the book value falling below the estimated salvage value. Therefore, depreciation expense is limited to \$60,000.

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plete this formula 200000 X 100 % = \$ 200000 plete this formula 200000 - \$ 12000 = \$ 108000 plete this formula % divided 2 years = 50 % X 200 Credit 12,000
= 100 \$

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20–45 Tara Anderson
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Tara-Anderson-week 7 excel assignment - 2042 1 Tara...

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