Question

In the blank to the left of each question, fill in the letter from the following list who the presentation of the item on the financial statements of Helton Corporation to er from the following list which best describes a. Change in estimate b. Prior period adjustment (not due to change in principle) C. Retrospective type accounting change with note disclosure d. None of these choices 1. the in 2018, the company changed its method of recognizing income from completed-contract method to the percentage-of-completion method. At the end of 2018, an audit revealed that the corporation's allowance for doubtful accounts was too large and should be reduced to 2%. When the audit was made in 2017, the allowance seemed appropriate. Depreciation on a truck. Acuired in 2015, was understated because the service we had been overestimated. The understatement had been made in order to show higher net income in 2016 and 2017 The company switched from a LIFO to a FIFO inventory valuation method during the current year. In the current year, the company decides to change from expensing certain costs to capitalizing these costs, due to a change in the period benefited. 6. During 2018, a long-term bond with a carrying value of $3,600,000 was retired at a cost of $4,100,000. After negotiations with the IRS, income taxes for 2016 were established at $42,900. They were originally estimated to be $28,600. 8. In 2018, the company incurred interest expense of $29,000 on a 20-year bond issue. 9. In computing the depreciation in 2016 for equipment, an error was made which overstated income in that year $75,000. The error was discovered in 2018. In 2018, the company changed its method of depreciating plant assets from th double-declining balance method to the straight-line method. 10.

Answer 1

Answer-

c. Retrospective type accounting change with note disclosure	1.	In 2018, the company changed its method of recognizing income from the completed-contract method to the percentage -of-completion method.
a.Change in estimate	2.	At the end of 2018,an audit revealed that the corporation's allowance for doubtful accounts was too large and should be reduced to 2%. When the audit was made in 2017, the allowance seemed appropriate.
b.Prior period adjustment (not due to change in principle)	3.	Depreciation on a truck, acquired in 2015, was understated because the service life had been overestimated. The understatement had been made in order to show higher net income in 2016 and 2017.
c. Retrospective type accounting change with note disclosure	4.	The company switched from a LIFO to a FIFO inventory valuation method during the current year.
a.Change in estimate	5.	In the current year, the company decides to change from expensing certain marketing costs to capitalizing these costs. The Company should have been capitalizing these costs under GAAP in prior years.
d.None of the above	6.	During 2018, a long-term bond with a carrying value of $3,600,000 was retired at a cost of $4,100,000.
a.Change in estimate	7.	After negotiations with the IRS, income taxes for 2016 were established at $42,900. They were originally estimated to be $28,600.
d.None of the above	8.	In 2018, the company incurred interest expense of $29,000 on 20-year bond issue.
b.Prior period adjustment (not due to change in principle)	9.	In computing the depreciation in 2016 for equipment, an error was made which overstated income in that year $75,000. The error was discovered in 2018.
a.Change in estimate	10.	In 2018, the company changed its method of depreciating plant assets from the double-declining balance method to the straight-line method.

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