Problem 22-1 The management of Pronghorn Instrument Company had concluded, with the concurrence of its independent audi...
Problem 22-01 The management of Nash Instrument Company had concluded, with the concurrence of its independent auditors, that results of operations would be more fairly presented if Nash changed its method of pricing inventory from last-in, first-out (LIFO) to average-cost in 2020. Given below is the 5-year summary of income under LIFO and a schedule of what the inventories would be if stated on the average-cost method. 2020 $18,820 NASH INSTRUMENT COMPANY STATEMENT OF INCOME AND RETAINED EARNINGS FOR THE...
Problem 22-1 The management of Cheyenne Instrument Company had concluded, with the concurrence of its independent auditors, that results of operations would be more fairly presented if Cheyenne changed its method of pricing inventory from last-in, first-out (LIFO) to average-cost in 2017. Given below is the 5-year summary of income under LIFO and a schedule of what the inventories would be if stated on the average-cost method. We were unable to transcribe this imageWe were unable to transcribe this imageProbu...
Problem 16-06 Pronghorn Corporation is preparing the comparative financial statements for the annual report to its shareholders for fiscal years ended May 31, 2020, and May 31, 2021. The income from operations for the fiscal year ended May 31, 2020, was $1,819,000 and income from continuing operations for the fiscal year ended May 31, 2009 an income from continuing operations to distupca 2021, was $2,469,000. In both years, the company incurred a 10% interest expense on $2,394,000 of debt, an...
Swifty Co. decides at the beginning of 2017 to adopt the FIFO method of inventory valuation. Swifty had used the LIFO method for financial reporting since its inception on January 1, 2015, and had maintained records adequate to apply the FIFO method retrospectively. Swifty concluded that FIFO is the preferable inventory method because it reflects the current cost of inventory on the balance sheet. The following table presents the effects of the change in accounting principles on inventory and cost...
The comparative statement of financial position of Pronghorn Inc. as at June 30, 2017, and a statement of comprehensive income for the 2017 fiscal year follow: PRONGHORN INC. Statement of Financial Position June 30, 2017 June 30 Assets 2017 2016 Cash $ 20,800 $ 39,520 Accounts receivable 89,440 76,960 Inventory 107,120 106,080 Prepaid expenses 2,080 6,240 Fair Value—OCI Investments 48,880 46,800 Equipment 179,920 165,360 Accumulated depreciation (36,400 ) (26,000 ) Total $ 411,840 $ 414,960 Liabilities and Shareholders’ Equity Accounts...
Pronghorn Corporation began operations on January 1, 2014. Recently the corporation has had several unusual accounting problems related to the presentation of its income statement for financial reporting purposes. The company follows ASPE. You are the CPA for Pronghorn and have been asked to examine the following data: PRONGHORN CORPORATION Income Statement For the Year Ended December 31, 2017 Sales $9,600,000 Cost of goods sold 5,960,000 Gross profit 3,640,000 Selling and administrative expense 1,314,000 Income before income tax 2,326,000 Income...
*Problem 13-02A a-c Pronghorn Corporation had the following stockholders' equity accounts on January 1, 2020: Common Stock (55 par) $550,000, Paid-in Capital in Excess of Par-Common Stock $180,000, and Retained Earnings $100,000. In 2020, the company had the following treasury stock trensactions, Mar. 1 Purchased 7,000 shares at $8 per share une Sold 1,500 shares at $13 per share. Sept.1 Sold 1,500 shares at $10 per share Dec. 1 Sold 1,000 shares at $7 per share. Pronghorn Corporetion uses the...
Problem 4-13 Pronghorn Corp. is a public company and has 100,000 common shares outstanding. In 2020, the company reported income from continuing operations before income tax of $2,926,800. Additional transactions not considered in the $2,926,800 are as follows: 1. In 2020, Pronghorn Corp. sold equipment for $151,200. The machine had originally cost $86,400 and had accumulated depreciation to date of $38,880. 2. The company discontinued operations of one of its subsidiaries during the current year at a loss of $313,200...
Presented below is information related to Pronghorn Inc. PRONGHORN INC. BALANCE SHEET DECEMBER 31, 2020 Cash $44,900 Notes payable (short-term) $50,000 Receivables $109,800 Accounts payable 32,000 Less: Allowance 15,100 94,700 Accrued liabilities 5,100 Inventory 171,200 Common stock (par $5) 261,800 Prepaid insurance 8,100 Retained earnings 141,000 Land 20,200 Equipment (net) 150,800 $489,900 $489,900 PRONGHORN INC. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2020 Sales revenue $1,401,600 Cost of goods sold Inventory, Jan. 1, 2020 $199,600 Purchases 796,000 Cost...
E22-4 (101) (Accounting Change) Gordon Company started operations on January 1, 2012, and has used the FIFO method of inventory valuation since its inception. In 2018, it decides to switch to the average cost method. You are provided with the following information Net Income Retained Earnings (Ending Balance) Under FIFO Under Average-Cost Under FIFO 2012 $100,000 $ 20,000 $100,000 70.000 65,000 160,000 2014 90.000 80,000 235,000 2015 120.000 130,000 340000 300.000 120,000 590,000 2017 305,000 310,000 780,000 2013 2016 Instructions...