In preparation for significant expansion of its international operations, Marigold Co. has adopted a plan to...
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In preparation for significant expansion of its international operations, Marigold Co. has adopted a plan to gradually shift to the same accounting methods as used by its international competitors. Part of this plan includes a switch from LIFO inventory accounting to FIFO (recall that IFRS does not allow LIFO). Marigold decides to make the switch to FIFO at January 1, 2020. The following data pertains to Marigold's 2020 financial statements (in millions of dollars). Sales Inventory purchases 12/31/20 inventory (using FIFO) Compensation expense Cash Inventory Property, plant, and equipment Accumulated depreciation $660 All sales and purchases were with cash. All of 2020's compensation expense was paid with cash. (Ignore taxes.) Marigold's property, plant, and equipment cost $510 million and has an estimated useful life of 10 years with no salvage value. Marigold Co. reported the following for fiscal 2019 (in millions of dollars): Total assets 460 $ 690 28 MARIGOLD CO. BALANCE SHEET AT DECEMBER 31, 2019 2019 464 610 510 (102) $1,482 $ 2018 310 590 510 (51) $ 1,359 Common stock Retained earnings Total equity 2019 2018 $ 610 $ 610 872 $ 1,482 749 $ 1,359 MARIGOLD CO. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2019 Sales Cost of goods sold Depreciation expense Compensation expense Net income (a) Cash 2019 $ 610 Inventory (410) Summary of Significant Accounting Policies Inventory: The company accounts for inventory by the LIFO method. The current cost of the company's inventory, which approximates FIFO, was $71 and $61 higher at the end of fiscal 2019 and 2018, respectively, than those reported in the balance sheet. (51) Property, Plant and Equipment. (26) $ 123 Prepare Marigold's December 31, 2020, balance sheet and an income statement for the year ended December 31, 2020. In columns beside 2020's numbers, include 2019's numbers as they would appear in the 2020 financial statements for comparative purposes. (List Assets in order of liquidity.) MARIGOLD CO. Balance Sheet December 31, 2020 $ 2020 + $ 2019 (a) Prepare Marigold's December 31, 2020, balance sheet and an income statement for the year ended December 31, 2020. In columns beside 2020's numbers, include 2019's numbers as they would appear in the 2020 financial statements for comparative purposes. (List Assets in order of liquidity.) Cash Inventory Property, Plant and Equipment Accumulated Depreciation Total Assets Common Stock Retained Earnings Total Equity + + MARIGOLD CO. Balance Sheet December 31, 2020 $ $ $ $ 2020 MARIGOLD CO. Income Statement For the Year Ended December 31, 2020 2020 + + $ 2019 2019 Retamed Ear Total Equity Sales Cost of Goods Sold Depreciation Expense Compensation Expense Net Income /(Loss) eTextbook and Media e Textbook List of Accounts MARIGOLD CO. Income Statement For the Year Ended December 31, 2020 Save for Later Last saved 18 minutes ago. $ $ 2020 + $ $ 2019 Assistance Used Attempts: 0 of 3 used Submit Answer In preparation for significant expansion of its international operations, Marigold Co. has adopted a plan to gradually shift to the same accounting methods as used by its international competitors. Part of this plan includes a switch from LIFO inventory accounting to FIFO (recall that IFRS does not allow LIFO). Marigold decides to make the switch to FIFO at January 1, 2020. The following data pertains to Marigold's 2020 financial statements (in millions of dollars). Sales Inventory purchases 12/31/20 inventory (using FIFO) Compensation expense Cash Inventory Property, plant, and equipment Accumulated depreciation $660 All sales and purchases were with cash. All of 2020's compensation expense was paid with cash. (Ignore taxes.) Marigold's property, plant, and equipment cost $510 million and has an estimated useful life of 10 years with no salvage value. Marigold Co. reported the following for fiscal 2019 (in millions of dollars): Total assets 460 $ 690 28 MARIGOLD CO. BALANCE SHEET AT DECEMBER 31, 2019 2019 464 610 510 (102) $1,482 $ 2018 310 590 510 (51) $ 1,359 Common stock Retained earnings Total equity 2019 2018 $ 610 $ 610 872 $ 1,482 749 $ 1,359 MARIGOLD CO. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2019 Sales Cost of goods sold Depreciation expense Compensation expense Net income (a) Cash 2019 $ 610 Inventory (410) Summary of Significant Accounting Policies Inventory: The company accounts for inventory by the LIFO method. The current cost of the company's inventory, which approximates FIFO, was $71 and $61 higher at the end of fiscal 2019 and 2018, respectively, than those reported in the balance sheet. (51) Property, Plant and Equipment. (26) $ 123 Prepare Marigold's December 31, 2020, balance sheet and an income statement for the year ended December 31, 2020. In columns beside 2020's numbers, include 2019's numbers as they would appear in the 2020 financial statements for comparative purposes. (List Assets in order of liquidity.) MARIGOLD CO. Balance Sheet December 31, 2020 $ 2020 + $ 2019 (a) Prepare Marigold's December 31, 2020, balance sheet and an income statement for the year ended December 31, 2020. In columns beside 2020's numbers, include 2019's numbers as they would appear in the 2020 financial statements for comparative purposes. (List Assets in order of liquidity.) Cash Inventory Property, Plant and Equipment Accumulated Depreciation Total Assets Common Stock Retained Earnings Total Equity + + MARIGOLD CO. Balance Sheet December 31, 2020 $ $ $ $ 2020 MARIGOLD CO. Income Statement For the Year Ended December 31, 2020 2020 + + $ 2019 2019 Retamed Ear Total Equity Sales Cost of Goods Sold Depreciation Expense Compensation Expense Net Income /(Loss) eTextbook and Media e Textbook List of Accounts MARIGOLD CO. Income Statement For the Year Ended December 31, 2020 Save for Later Last saved 18 minutes ago. $ $ 2020 + $ $ 2019 Assistance Used Attempts: 0 of 3 used Submit Answer
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Related Book For
Intermediate Accounting
ISBN: 978-0470616314
IFRS edition volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
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