Get Guided ACCT 557 Week 5 Homework Assignment: Chapter 22


Get Guided ACCT 557 Week 5 Homework Assignment Chapter 22


Problems: The Diamond Glitter Company is in the process of preparing its financial statements for 2012. Assume that no entries for depreciation have been recorded in 2012. The following information related to depreciation of fixed assets is provided to you.

  1. The company purchased equipment on January 2, 2009, for $165000. At that time, the equipment had an estimated useful life of 7 years with a $25000 salvage value. The equipment is depreciated on a straight-line basis. On January 2, 2012, as a result of additional information, the company determined that the equipment has a remaining useful life of 3 years with a $15000 salvage value.
  2. During 2012, the company changed from the double-declining-balance method for its building to the straight-line method. The building originally cost $625000. It had a useful life of 10 years and a salvage value of $50000. The following computations present depreciation on both bases for 2010 and 2011.
    2011 2010
    Straight-line $ 57,500 $ 57,500
    Declining-balance $ 92,000 $ 115,000
  3. The company purchased a machine on July 1, 2010, at a cost of $450000. The machine has a salvage value of $25000 and a useful life of 10 years. The company’s bookkeeper recorded straight-line depreciation in 2010 and 2011 but failed to consider the salvage value. Ignore Tax effect.
  4. The company has failed to accrue sales commissions payable at the end of each of the last 2 years, as follows.
    December 31, 2011 $ 5,400
    December 31, 2012 $ 4,600
  5. In reviewing the December 31, 2011, inventory, the company discovered errors in its inventory-taking procedures that have caused inventories for the last 3 years to be incorrect, as follows. The company has already made an entry that established the incorrect December 31, 2012, inventory amount.
    December’31, 2010 Understated $ 32,000
    December.31, 2011 Understated $ 51,000
    December 31, 2012 Overstated $ 9,500
  6. At December 31, 2012, the company decided to change to the straight -line method depreciation method on its retail display equipment from double-declining-balance. The equipment had an original cost of $250000 when purchased on January 1, 2011. It has a salvage value of 0 and a 8-year useful life. Depreciation expense recorded prior to 2012 under the double-declining-balance method was $62500. The company has already recorded 2012 depreciation expense of $46875 using the double-declining-balance method.
  7. Before the current year, the company accounted for its income from long-term construction contracts on the completed-contract basis. Early this year, the company changed to the percentage-of-completion basis for accounting purposes but continues to use the completed-contract method for tax purposes. Income for the current year has been recorded using the new method. Prior year tax effects must be considered. The following information is available.
    Pretax Income
    Percentage-of-Completion Completed-Contract
    Prior to 2012 $320,000 $180,000
    2012 $140,000 $120,000

Required: Prepare the journal entries necessary at December 31, 2012, to record the corrections and changes made to date related to the information provided. The books are still open for 2012. The income tax rate is 35%. The company has not yet recorded its 2012 income tax expense and payable amounts so current-year tax effects may be ignored….Summer 2016


Need Help with Assignments?


Are your checks across the corner? Are you thinking, I want a person to take my online exam? Do you need a person that will help you out in those dire instances of yours? Welcome to Get Exam Done. We are an educational assistance provider that connects expert lecturers to suffering college students. We assist college students with their online checks with the aid of using supporting them hands-on all through the examination. It does not rely on what your difficulty is, we’ve got professionals in all of them. So, come aboard! Let’s deal with your take my examination online worries. We are to be had 24/7. You can name us anytime, communicate approximately your online examination problems, and get solutions. For custom, help email us at [email protected] or WhatsApp us at +1(657)366-7486


Scott Belmont from NYC, USA
Hired a tutor to take programming class and final exam
40 minutes ago
Ebony Nicole from Bronx, USA
Hired a tutor to take history and algebra final exams
2 hours ago
Randy Wells from Texas, USA
Hired an expert to take chemistry proctored exam
1 hour ago
Kurt LeBlanc from Iowa, USA
Hired an expert to take statistics online exam
1 hour ago