Under ifrs changes in accounting policies are a

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Survey of Accounting
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Chapter 7 / Exercise E7-16
Survey of Accounting
Warren
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28. Under IFRS, changes in accounting policies are
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Survey of Accounting
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Chapter 7 / Exercise E7-16
Survey of Accounting
Warren
Expert Verified
d. Required if an alternate accounting policy gives rise to a material change in assets, liabilities, or the current year net income. equipment 4,700 Extraordinary gain 1,500 Total revenues $191,000 In the revenues section of the year 1 income statement, Baer Food should have reported total revenues of 29. Under IFRS, a voluntary change in accounting method may only be made by a company if D.1. Income and Retained Earnings Statements 1. In Baer Food Co.’s year 1 single-step income statement, the section titled “Revenues” consisted of the following: Net sales revenue $187,000 Results from discontinued operations: Loss from discontinued component Z including loss on disposal of $1,200 $16,400 Less tax benefit 4,000 (12,400) Interest revenue 10,200 Gain on sale of equipment 4,700 Extraordinary gain 1,500 Total revenues $191,000 In the revenues section of the year 1 income statement, Baer Food should have reported total revenues of Items 2 and 3 are based on the following: Vane Co.’s trial balance of income statement accounts for the year ended December 31, year 2, included the following: Debit Credit Sales $575,000 Cost of sales $240,000 Administrative expenses 70,000 Loss on sale of equipment 10,000 Sales commissions 50,000 Interest revenue 25,000 Freight-out 15,000 Loss on early retirement of long-term debt 20,000 Uncollectible accounts expense 15,000 Totals $420,000 $600,000 Other information Finished goods inventory: January 1, year 2 $400,000 December 31, year 2 360,000 Vane’s income tax rate is 30%. In Vane’s year 2 multiple-step income statement, 2. What amount should Vane report as the cost of goods manufactured? a. $200,000 b. $215,000 c. $280,000 d. $295,000 3. What amount should Vane report as income after income taxes from continuing operations? 4. Brock Corp. reports operating expenses in two categories: (1) selling, and (2) general and administrative. The adjusted trial balance at December 31, year 1, included the following expense and loss accounts: Accounting and legal fees $120,000 Advertising 150,000 Freight-out 80,000 Interest 70,000 Loss on sale of long-term investment 30,000 Officers’ salaries 225,000 Rent for office space 220,000 Sales salaries and commissions 140,000 One- half of the rented premises is occupied by the sales department. Brock’s total selling expenses for year 1 are

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