Presented below are the comparative income statements for Denise Habbe Inc. for the years 2007 and 2008. The following additional information is provided:1. In 2008, Denise Habbe Inc. decided to switch its depreciation method from sum-of-the-years'-digits to the straight-line method. The assets were purchased at the beginning of 2007 for $100,000 with an estimated useful life of 4 years and

Chapter 18, Exercises #7

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Presented below are the comparative income statements for Denise Habbe Inc. for the years 2007 and 2008.


Presented below are the comparative income statements for Denise


The following additional information is provided:
1. In 2008, Denise Habbe Inc. decided to switch its depreciation method from sum-of-the-years'-digits to the straight-line method. The assets were purchased at the beginning of 2007 for $100,000 with an estimated useful life of 4 years and no salvage value. (The 2008 income statement contains depreciation expense of $30,000 on the assets purchased at the beginning of 2007.)
2. In 2008, the company discovered that the ending inventory for 2007 was overstated by $24,000; ending inventory for 2008 is correctly stated.
Instructions
Prepare the revised retained earnings statement for 2007 and 2008, assuming comparative statements. (Ignore incometaxes.)

Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula                Ending Inventory Formula =...
Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...
Related Book For answer-question

Intermediate Accounting principles and analysis

2nd Edition

Authors: Terry d. Warfield, jerry j. weygandt, Donald e. kieso

ISBN: 978-0471737933