20–38. Accumulated Depreciation—Equipment 100,000 Cumulative Effect of Change in Accounting Principle 100,000 computations



Download 56 Kb.
Page1/5
Date08.03.2021
Size56 Kb.
#154873
  1   2   3   4   5

Chapter 20

CHAPTER 20

PROBLEMS

20–38.
1. Accumulated Depreciation—Equipment 100,000

Cumulative Effect of Change in Accounting Principle 100,000

COMPUTATIONS:

Sum-of-the-years’ digits Straight-line

2002 (5/15  $500,000) = $166,667 $100,000

2003 (4/15  $500,000) = 133,333 100,000

2004 (3/15  $500,000) = 100,000 100,000

$400,000 $300,000
Cumulative effect of change in accounting principle:

$400,000 – $300,000 = $100,000
2. Comparative data:

2005 2004

Income from continuing operations $ 892,679* $ 856,000

Cumulative effect on prior years of changing from

accelerated to straight-line depreciation on

equipment 100,000

Net income $ 992,679 $ 856,000
Earnings per share of common stock:

Income before cumulative effect of change in

accounting principle $4.46 $4.28

Cumulative effect of change in depreciation method 0.50

Net income $4.96 $4.28



Download 56 Kb.

Share with your friends:
  1   2   3   4   5




The database is protected by copyright ©essaydocs.org 2022
send message

    Main page