Question

As a certified public accountant, you have been contacted by Joe Davidson, CEO of Sports Pro...

As a certified public accountant, you have been contacted by Joe Davidson, CEO of Sports Pro Athletics, Inc., a manufacturer of a variety of athletic equipment. He has asked you how to account for the following changes 1. Sports pro appropriately changed its depreciation method for its machinery from the doucle declining balance method to units of production method effective January 1, 2020. 2. Effective January 1, 2020 Sports Pro appropriately changed tha salvage values used in computing depreciation on its office equipment. 3. On December 31, 2020 sports pro changed the specific subsidiaries constuting the group of companies for which consolidate financial statements are presented.

Required: Prepare a memo to Joe Davidson explaining how each of the above changes should be presented in the December 31, 2020 financial statements.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

CHANGE1

Reduce the accumulated depreciation from double declining method for the actual carrying value of asset in december 31 ,2019 and apply the new depreciation method from the january 1,2020 and present in financial statement with the new method

CHANGE 2

Represent the new value on financial statement, if their is reduction in value it must be presented in profit and loss statement.And gain must be presented in other comprehensive income and then to equipment.

CHANGE 3

Take of the investment from the subsidery withdrawn from financial statment and add the proceeding from the investment into cash balance.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
2) Equipment was purchased at the beginning of 2019 for $900,000. At the time of its...
2) Equipment was purchased at the beginning of 2019 for $900,000. At the time of its purchase, the equipment was estimated to have a useful life of five years and a salvage value of $100,000. The equipment was depreciated using the straight-line method of depreciation through 2021. At the beginning of 2022, the estimate of useful life was revised to a total life of seven years and the expected salvage value was changed to $42,500. The amount to be recorded...
Q1: Assume you have that you have the following information when preparing the consolidated financial statements...
Q1: Assume you have that you have the following information when preparing the consolidated financial statements in 2020 (fiscal year end is 12/31/2020). The consolidated entity includes the parent company and an 80%-owned subsidiary. On January 1, 2018, the subsidiary sold to its parent, for a sale price of $120,000, equipment that originally cost $180,000. The subsidiary originally purchased the equipment on January 1, 2015, and depreciated the equipment assuming a 12-year useful life (straight-line with no salvage value). The...
You have been assigned to examine the financial statements of PC corp. for the year ended...
You have been assigned to examine the financial statements of PC corp. for the year ended December 31, 2019, as prepared following IFRS. You discover the following situations: Physical inventory count on Dec31, 2018, improperly excluded merchandise costing $13,000 that had been temporarily stored in a public warehouse. PC uses periodic inventory system Physical inventory count on Dec31,2019, improperly included merchandise with a cost of $26,000 that had been recorded as a sale on Dec27, 2019, and was being held...
Balance Sheet Assets: 12/31/19 Current Assets: Cash $               3,000.00 Accounts Receivable             &nb
Balance Sheet Assets: 12/31/19 Current Assets: Cash $               3,000.00 Accounts Receivable                    1,250.00 Prepaid Expenses $                    100.00 Total Current Assets $               4,350.00 Non-Current Assets: Property, Plant, and Equipment Land $            10,000.00 Buildings                 25,000.00 Equipment                 15,000.00 Accumulated Depreciation $          (12,000.00) Total Property, Plant, and Equipment $            38,000.00 Total Assets $            42,350.00 Liabilities: Current Liabilities Accounts Payable $                    100.00 Accrued Expense                         150.00 Salary and Wages Payable                                      -   Notes Payable                                      -   Unearned Revenue $               1,500.00 Total Liabilities $              ...
ACC 308 Final Project Scenario Overview: You just began a position as a financial accountant at...
ACC 308 Final Project Scenario Overview: You just began a position as a financial accountant at Peyton Approved. In this role, your first task is to prepare the company’s financials for the year-end audit. Additionally, the company is interested in expanding its business within the next year. They would like your support in assessing their ability to meet their goals. Refer to the data below and use the Final Project Workbook that includes the income statement, balance sheet, retained earnings...
Consolidated Statement of Cash Flows Here are the consolidated financial statements of Post Ranch Resort and...
Consolidated Statement of Cash Flows Here are the consolidated financial statements of Post Ranch Resort and its 70 percent owned subsidiary, Sandpearl, for the year ended December 31, 2020, plus supplementary information. Comparative balance sheets are provided for 2019 and 2020. Consolidated Balance Sheets Consolidated Income Statement December 31 2020 2019 Sales and other income $250,000,000 Cash $150,000 $113,000 Cost of sales -170,000,000 Receivables 325,000 310,000 Operating expenses -79,800,000 Inventories 1,400,000 1,450,000 Consolidated net income 200,000 Equity method investments 200,000...
Chemalite, Inc. (B) Cash Flow Analysis Bennett Alexander, a chemical engineer, founded Chemalite, Inc. in late...
Chemalite, Inc. (B) Cash Flow Analysis Bennett Alexander, a chemical engineer, founded Chemalite, Inc. in late 2002. The company was set up to manufacture and sell his latest patented invention, the Chemalite. The first year of operations was successful, allowing Chemalite's directors to declare a $10,000 dividend at the end of 2004. Exhibit 1 presents the income statement and balance sheet for the year ended December 31, 2004. During the meeting with the company shareholders, held in January 2005, Alexander...
During the trial, lawyers for the accused said that the men believed that the accounting decisions...
During the trial, lawyers for the accused said that the men believed that the accounting decisions they made were appropriate at the time, and that the accounting treatment was approved by Nortel’s auditors from Deloitte & Touche. Judge Marrocco accepted these arguments. Marrocco added he was “not satisfied beyond a reasonable doubt” that the trio (i.e., Dunn, Beatty, and Gollogly) had “deliberately misrepresented” financial results. Given the facts of the case, do you believe Judge Marrocco’s decision was justified? Explain....
Please read the article and answear about questions. Determining the Value of the Business After you...
Please read the article and answear about questions. Determining the Value of the Business After you have completed a thorough and exacting investigation, you need to analyze all the infor- mation you have gathered. This is the time to consult with your business, financial, and legal advis- ers to arrive at an estimate of the value of the business. Outside advisers are impartial and are more likely to see the bad things about the business than are you. You should...
What tools could AA leaders have used to increase their awareness of internal and external issues?...
What tools could AA leaders have used to increase their awareness of internal and external issues? ???ALASKA AIRLINES: NAVIGATING CHANGE In the autumn of 2007, Alaska Airlines executives adjourned at the end of a long and stressful day in the midst of a multi-day strategic planning session. Most headed outside to relax, unwind and enjoy a bonfire on the shore of Semiahmoo Spit, outside the meeting venue in Blaine, a seaport town in northwest Washington state. Meanwhile, several members of...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT