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3 years ago

How do you determine if a change in principle should be reported retroactively, currently, or prospectively?

1 answer:

5 0

A cumulative-effect type change (current) in accounting principle can be reported by using current method. The prior period financial statements that are included for comparison cannot be restated. Considering the extraordinary items and net income on the income statement, the increasing effect of accounting change have to be reported.If there are Pro forma amounts in any period must be published as supplemental information.

Retroactive method is used to report any retroactive-effect type change in accounting principle. The company evaluates the cumulative effect of implementing any new method on financial statement in the beginning of the year. This new accounting principle is used to restate the pior period financial statements. If the cumulative effect is significant than the periods shown in the financial statements, the beginning retained earnings of the prior year being presented would be adjusted.

LIFO (last-in, first-out) method of inventory is reported using the prospective method.The starting inventory amount for a particular year the change is adopted is identified as the base-year inventory for the future. Restating the prior periods’ income is not practical in prospective method. Any change to the Last In First Out method of inventory valuation need to be disclosed by the company.

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Current Attempt in Progress Suppose at December 31 of a recent year, the following information (in thousands) was available for

alex41 [277]

Answer:

OAKLEY

INVENTORY TURNOVER 2,66

Cost Of Goods 395,010

Average Inventory 148,500

DAYS IN INVENTORY 137

Explanation:

To calculate the Inventory Turnover ratio it's necessary to calculate the average inventory of the year , the take the Total Cost of Goods and divide it by the Average Inventory, the result it's the Inventory Turnover of the company, in this case 2,66

To find the days in inventory we have to divide 365 (days of the year) and divide it by the Inventory Turnover, 2,66, the result is 137 days.

END START

$172,000 $125,000 Inventory

$ 768,000 Sales Revenue

$ 395,010 Cost of Goods Sold

OAKLEY

INVENTORY TURNOVER 2,66

Cost Of Goods 395,010

Average Inventory 148,500

DAYS IN INVENTORY 137

4 0

4 years ago

The following information summarizes the standard cost for producing one metal tennis racket frame at Spaulding Industries. In a

astra-53 [7]

Answer:

Actual Price paid for materials = $4.2136 $\times$ 2,200 = $9,270

Actual price per unit = $4.2136

Explanation:

Provided information,

Standard Material per unit = $4

Total cost = $8,400

Standard Quantity = $8,400/$4 = 2,100 units

Provided Material Price variance = $470 unfavorable = - $470

$= (Standard Price - Actual Price) \times Actual Units$

Material Quantity Variance = $400 Unfavorable = - $400

$= (Standard Quantity - Actual Quantity) \times Standard Rate$

Using Material Quantity Variance

- $400 = (2,100 - Actual Quantity) $\times$ $4

-$400/$4 = 2,100 - Actual Quantity

Actual Quantity = 2,100 + 100 = 2,200 units

Now, putting this value in Material Price Variance we have,

- $470 = ($4 - Actual Price) $\times$ 2,200

-$470/2,200 = $4 - Actual Price

- $0.214 = $4 - Actual Price

Actual Price = $4 + $0.2136 = $4.2136

Final Answer

Actual Price paid for materials = $4.2136 $\times$ 2,200 = $9,270

Actual price per unit = $4.2136

8 0

4 years ago

In the context of management planning, _____ refers to high-level, long-term planning that establishes a vision for the company,

ziro4ka [17]

Answer:

Strategic Planning

Explanation:

Strategic plan accounts for long term goals and vision of a company. While planning strategically, leaders draw the road map for their company which solves how-to questions in achieving those goals. Moreover, through their set priorities, the company's value and vision would also be sorted out. As there are multiple planning dimensions, strategic planning can be differentiated from the others by identifying these 2 factors.

Time Horizon: Strategic planning is done for the long term usually for 5-6 years.
Formation of plan: Within the hierarchy of an organization only high-level leaders are the ones responsible to come up with strategic planning.

5 0

3 years ago

What is an accurate definition of a value?

jenyasd209 [6]

Answer:

A possible answer: Value is how much worth something has to you.

Explanation:

Have a great rest of your day :)

4 0

3 years ago

At a price of $9.99, Danielle buys 3 digital books per month. When the price decreases to $7.99, Danielle buys 4 digital books p

Studentka2010 [4]

Answer:

The correct answer D

Explanation:

When the price of the product is $9,99, then the customer bought 3 books per month. But when the price decreases from $9.99 to $7.99, then the customer bought 4 books per month. Because when the price of the product decreases, the quantity demanded for the product increases for the while and when the prices increases, the quantity demanded decreases, it is not constant.

Therefore, Jason is in correct as the demand for the product has not increases, but only the quantity demanded has increased.

8 0

3 years ago