1_ Award: 0 out of 6.66 points 5'1 W m
The CecilBooker Vending Company changed its method of valuing inventory from the average cost method
to the FIFO cost method at the beginning of 2016. At December 31, 2015, inventories were
Award: 0 out of 6.68 points
At the beginning of 2016, Wagner Implements undertook a variety of changes in accounting methods.
corrected several errors, and instituted new accounting policies.
Identify for each item below the type of ch
Award: 0 out of 6.66 points Show my answer
Described below are six independent and unrelated situations involving accounting changes. Each change
occurs during 2016 before any adjusting entries or closing entries were prepared. Assume the tax rate for
2. Prepare the 20152015 comparative income statements beginning with income from continuing
operations. Include per share amounts. [Round EPB answers to 2 decimal places.)
Income from continuing operations 525.000 309.000
Income tax expense [210,000] [155
-o p chat on:
2016 adjusting entry:
Warranty expense cfw_2% 3-! $4,000,000 = $30,000
If the effect is material, a disclosure note shouid describe the eect of a change in estimate on income from
continuing operations, net income, and related per share a
Calculation oi SYD depreciation:
x $330000 = $102,000
To revise the liability on the basis of the new estimate:
Liability litigation cfw_5350.000 $200,000) = 5150.000
A disclosure note should describe the effect of a change in estimate o
P 1 By acquiring additional stock, Wagner increased its investment in Wise, Inc., from a 12% interestto 25% and
' changed its method of accounting for the investment to the equity method.
N 2. Walgner instituted a postretirement benet plan for its employe
Late in 2015, a setliement was reached 1.Illrith state authorities to pay a total of $350,000 in penalties.
1. At the beginning of 2016, Jantzen Specialties, which uses the sumdtheyears'digits method. changed
to the straight-line method for newly acquired
1_ Award: 0 out of 6.65 points 5'10" W m
The Cecil-Booker 1it'ending Company changed its method of valuing inventory from the average cost method
to the FIFO cost method at the beginning of 2010. At December 31, 2015, inventories
This is a change in accounting estimate resulting from a change in accounting principle.
A change in depreciation method is considered a change in accounting estimate resulting from a change
in accounting principle. Accordingly. the Homan Group reports
Chapter 20 Accounting Changes
1. Most, but not all, changes in accounting principle are reported using the retrospective
Level of Learning: 1 Easy
Learning Objective: 20-01
Topic Area: Types of accounting change
Accounting Changes and Error Corrections
QUESTIONS FOR REVIEW OF KEY TOPICS
Accounting changes are categorized as:
1. Changes in principle (when companies switch from one acceptable
accounting method to another)
2. Changes in esti
To record the change:
Retained earnings .
Inventory ($32 million 23.8 million).
B & B applies the average cost method retrospectively; that is, to all
prior periods as if it always had used that me
Review Test Submission: Test 4 - Chapter 12 (Warranties/.
What is the standard measure of compensatory damages when a contract is breached?
How are damages computed differently in construction contracts?
The difference between the value of the breaching partys promised
performance under that contract and the val
Definitions - Answers
A person having good reason to believe to be in danger of serious injury or death
and uses force to protect self
Willful and malicious burning of a house or other building
Take the life of the convicted by use of various means,
WISCONSIN REALTORS ASSOCIATION
4801 Forest Run Road
Madison, Wisconsin 53704
Page 1 of 2
RESIDENTIAL RENTAL CONTRACT
(For month-to-month tenancy or definite lease term, not intended for agricultural or mobile home purposes)
1 This Contract for the rental
Gross Income Inclusions and
When and How to Record Income
for Tax Purposes
Income Recognition for Tax Purposes
Similar to the recognition for accounting
Income must be realized and earned
However, three additional condition
Introduction to Taxation
Income Tax Objectives
Main Purpose: To
raise revenue for the
Authorizes congress to
levy and collect taxes
Adjustments For Adjusted
Student Loan Interest Deduction
Taxpayers may deduct up to $2,500 each year as an
above-the-line deduction for interest paid on student loans.
No deduction is allowed for person who is claimed as a
Standard Deduction, Filing Status,
Personal Exemptions, and More.
A two-page form, with a few supporting
schedules, which is more complicated than
the 1040EZ, but less complicated than the
I never use this form.
What Are Itemized
deductions are certain
government says you
Not all personal
Medical Expenses Qualificati
Property: Basis and Sale
of Capital Assets
Realized Gain/Loss = amount realized
less adjusted basis.
Recognized Gain/Loss = amount of
realized gain/loss that gets reported on
the current years tax return.
Deferred Gain/Loss = r
Tax Ethics Cases
Tim Trying, who is single, purchased a house on a lake in southern Wisconsin 35 years ago. He is
now retiring and is moving to Hawaii. Tim sold his house for $1,000,000 this year. Tim has been
a client of yours for the
Individual Retirement Accounts
- A Little History
Individual retirement accounts began in
the early 1970s.
From their inception up to 1986, IRA
contributions were fully tax deductible
(above the line).
Cash vs. Accrual
Cash method taxpayer income
Accrual method reportsdeducts when it
expenses when paid, and reports
is earned and expenses when they
income when cash is actually or
Rental Property, Royalties and
Schedule E - Rentals
Schedule E is used for taxpayers who
Its just another profit/loss statements.
If rental activity shows a profit - it is
fully taxable as ordinary income.
Multijurisdictional Taxation: International and
State and Local Transactions
TRUE-FALSE QUESTIONSCHAPTER 25
A franchise tax is a tax levied on the prots of a franchisor.