MPotter_Accounting Changes_072111

MPotter_Accounting Changes_072111 - using new depreciation...

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Year Pretax Income from Percentage of Completed Completion Contract Prior to 2010 600000 400000 In 2010 500000 300000 Total at Beginning of 2011 1100000 700000 Total in 2011 450000 400000 Problem 1 1-Jan-11 Construction in Progress $400,000 Deferred Tax Liability Retained Earnings Changes in accounting estimate To record change to Percentage of Completion from Completed Contract Method Year Depreciation Value Depreciation Amount 2009 (5/15) 40000 2010 (4/15) 32000 Depr to date 72000 72000 48000 24000 Problem 2 b. 48000/3= 16000 Remaining value divided by rem 12/31/2011 Depreciation Expense 16000 Accumulated Depreciation 16000 To record Depreciation for Bulldozer for 2011
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Unformatted text preview: using new depreciation method/straight line a. There would be no adjusting for prior years difference. The difference will be acknowledged in t depreciation life of the asset. Difference in Income d Tax Effect Income Effect Difference 40% (Net of Tax) 200000 80000 120000 200000 80000 120000 400000 160000 240000 50000 20000 30000 $160,000 $240,000 32000 48000 Remaining Value 120000 80000 2009 (1/5) 24000 48000 2010 (1/5) 24000 Value 48000 2011 24000 32000 Depr Straight 72000 24000 8000 the remaining...
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This note was uploaded on 08/15/2011 for the course ACCT 400 taught by Professor Reif during the Spring '11 term at Rasmussen College.

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MPotter_Accounting Changes_072111 - using new depreciation...

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