Presented below are the comparative statements for Titan Company. The following additional information is provided: 1. In
Question:
Presented below are the comparative statements for Titan Company.
The following additional information is provided:
1. In 2014, Titan decided to switch its depreciation method from the straight-line method to the double-declining-balance method. The assets were purchased at the beginning of 2013 for $200,000 with an estimated useful life of 5 years and no salvage value. (The 2014 income statement contains depreciation expense of $40,000.)
2. In 2014, the company discovered that the ending inventory for 2013 was understated by $33,000; ending inventory for 2014 is correctly stated.
Instructions
Prepare the revised income and retained earnings statement for 2013 and 2014, assuming comparativestatements.
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...
Step by Step Answer:
Intermediate Accounting
ISBN: 978-1118147290
15th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, and Terry D. Warfield