Information for a firm making an accounting change follows: Tax rate: 30%
Common shares outstanding entire year for both years: 100; Retained earnings, 1/1/x0: $6,000
The firm changes from SYD to SL depreciation in 20x1 for financial reporting purposes only. Required:
(a)The 20x1 entries to record the accounting change and depreciation expense for 20x1.
(b)The comparative 20x0 and 20x1 income statements including pro forma disclosures if needed, EPS, and any disclosure footnote required.

Question

Information for a firm making an accounting change follows:  Tax rate: 30%
Common shares outstanding entire year for both years: 100; Retained earnings, 1/1/x0: $6,000
The firm changes from SYD to SL depreciation in 20x1 for financial reporting purposes only.  Required:
(a)The 20x1 entries to record the accounting change and depreciation expense for 20x1.
(b)The comparative 20x0 and 20x1 income statements including pro forma disclosures if needed, EPS, and any disclosure footnote required.

Quizplus · Accepted Answer

The Answer of Information for a firm making an accounting change follows:  Tax rate: 30%
Common shares outstanding entire year for both years: 100; Retained earnings, 1/1/x0: $6,000
The firm changes from SYD to SL depreciation in 20x1 for financial reporting purposes only.  Required:
(a)The 20x1 entries to record the accounting change and depreciation expense for 20x1.
(b)The comparative 20x0 and 20x1 income statements including pro forma disclosures if needed, EPS, and any disclosure footnote required.

Information for a Firm Making an Accounting Change Follows