Questions from Intermediate Accounting

Q: Greer Incorporated discovered the following errors on the books at the beginning

Greer Incorporated discovered the following errors on the books at the beginning of 2017: a. Maintenance expense on account was overstated by $20,000 in 2015 and understated by $30,000 in 2016. The pa...

Q: Arlen Technology Solutions, Inc. adopted the percentage-of-

Arlen Technology Solutions, Inc. adopted the percentage-of-completion method when it began operations on January 1, 2016. The company elected to change to the completed-contract method on January 1, 2...

Q: On January 1, Plum Company issued $800,000 par

On January 1, Plum Company issued $800,000 par value, 8%, 5-year bonds (i.e., there were 800 of $1,000 par value bonds in the issue). Interest is payable semiannually each January 1 and July 1 with th...

Q: Liberty Associates recently hired Gervin Brothers to develop an online sales system

Liberty Associates recently hired Gervin Brothers to develop an online sales system for its consumer products division. The customized online system does not have a readily determinable market value....

Q: Winthur Stores began operations on January 1, 2014, and adopted

Winthur Stores began operations on January 1, 2014, and adopted the FIFO method of accounting for its inventory for book and tax purposes. In 2017, it is considering a change to the average-cost metho...

Q: Corrnuto Equipment Manufacturers, Inc. (CEM) reported the net

Corrnuto Equipment Manufacturers, Inc. (CEM) reported the net book value of a plant asset at $2,600,000 on January 1 of the current year. There is a $500,000 expected residual value, and the estimated...

Q: Hi-Lo Corporation elected to change its method of depreciation from

Hi-Lo Corporation elected to change its method of depreciation from the double-declining balance method to the straight-line method on January 1, of the current year. It acquired the equipment 2 years...

Q: Feinstein and Company completed an internal audit of its bookkeeping system that

Feinstein and Company completed an internal audit of its bookkeeping system that uncovered several errors. It discovered the errors on December 31 before the books were closed. a. A $45,000 payment fo...

Q: Lombardo Lumber Company incorrectly recorded inventory in 2017. Rather than recording

Lombardo Lumber Company incorrectly recorded inventory in 2017. Rather than recording ending inventory as $500, Lombardo’s accounting manager entered $560, overstating ending invento...

Q: Tuscany Timber Company incorrectly recorded inventory in 2017. Rather than recording

Tuscany Timber Company incorrectly recorded inventory in 2017. Rather than recording ending inventory as $2,200, Tuscany’s accounting manager entered $2,500. An inventory summary for...