Net Income Preferred Dividends Weighted Average of Common Shares Outstanding

Net income preferred dividends weighted average of

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Net Income - Preferred Dividends Weighted Average of Common Shares Outstanding Advance slide in presentation mode to reveal answers.
4-36 EPS Divide by weighted- average shares outstanding Illustration 4-19 Earnings per Share Earnings per Share LO 5
4-37 Retrospective adjustment. Cumulative effect adjustment to beginning retained earnings. Approach preserves comparability across years. Examples include: change from FIFO to average cost. change from the percentage-of-completion to the completed-contract method. Other Reporting Issues Other Reporting Issues Accounting Changes and Errors LO 6 Understand the reporting of accounting changes and errors. Changes in Accounting Principle
4-38 Change in Accounting Principle: Gaubert Inc. decided in March 2014 to change from FIFO to weighted-average inventory pricing. Gaubert’s income before taxes, using the new weighted-average method in 2014, is $30,000. Illustration 4-20 Calculation of a Change in Accounting Principle Illustration 4-21 Income Statement Presentation of a Change in Accounting Principle (Based on 30% tax rate) Pretax Income Data Accounting Changes Accounting Changes Advance slide in presentation mode to reveal answers. LO 6
4-39 Accounted for in the period of change or the period of and the future periods if the change affects both. Not handled retrospectively. Not considered errors. Examples include: Useful lives and salvage values of depreciable assets. Allowance for uncollectible receivables. Inventory obsolescence. Change in Accounting Estimates Accounting Changes Accounting Changes LO 6 Understand the reporting of accounting changes and errors.
4-40 Change in Estimate:Arcadia HS, purchased equipment for $510,000 which was estimated to have a useful life of 10 years with a salvage value of $10,000 at the end of that time. Depreciation has been recorded for 7 years on a straight-line basis. In 2014 (year 8), it is determined that the total estimated life should be 15 years with a salvage value of $5,000 at the end of that time.Questions:What is the journal entry to correct the prior years’ depreciation?Calculate the depreciation expense for 2014.Change in Accounting Estimate Change in Accounting Estimate LO 6 Understand the reporting of accounting changes and errors.
4-41 Equipment $510,000 Fixed Assets: Accumulated depreciation 350,000 Net book value (NBV) $160,000 Balance Sheet (Dec. 31, 2013) After 7 years Equipment cost $510,000 Salvage value - 10,000 Depreciable base 500,000 Useful life (original) 10 years Annual depreciation $ 50,000 x 7 years = $350,000 First, establish NBV at date of change in estimate. First, establish NBV at date of change in estimate. Change in Accounting Estimate Change in Accounting Estimate LO 6 Understand the reporting of accounting changes and errors.
4-42 Net book value $160,000 Salvage value (new) 5,000 Depreciable base 155,000 Useful life remaining 8 years Annual depreciation $ 19,375 Depreciation Expense calculation for 2014.

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