UMUC ACCT311 homework 7

| June 9, 2016

Question
Homework 7

BE 15-1

At thebeginningofits fiscal year,Lakeside,Inc.leased office spacetoLTT Corporation underaseven-yearoperatinglease agreement. The contract calls

BE 15-2

BE 15-3

BE 15-4

BE 15-5

BE 20-1

In 2013, the Barton and Barton Company changed its method of valuing inventory from the FIFO method to the average cost method. At December 31, 2012, B&B’s inventories were $32 million (FIFO). B&B’s records indicated that the inventories would have totaled $23.8 million at December 31, 2012, if determined on an average cost basis. Ignoring income taxes, what journal entry will B&B use to record the adjustment in 2013? Briefly describe other steps B&B should take to report the change.

BE 20-2

In 2013, Adonis Industries changed its method of valuing inventory from the average cost method to the FIFO method. At December 31, 2012, AdonisAc€?cs inventories were $48.4 million (average cost). AdonisAc€?cs records indicated that the inventories would have totaled $65.6 million at December 31, 2012, if determined on a FIFO basis.

Ignoring income taxes, what journal entry will Adonis use to record the adjustment in 2013?

BE 20-4

Irwin, Inc., constructed a machine at a total cost of $35 million. Construction was completed at the end of 2009 and the machine was placed in service at the beginning of 2010. The machine was being depreciated over a 10-year life using the straight-line method. The residual value is expected to be $3 million. At the beginning of 2013, Irwin decided to change to the sum-of-the-yearsAc€?c-digits method. Ignoring income taxes, prepare the journal entry to record relating to the machine for 2013.

BE 20-5

BE 20-8

BE 20-9

BE 20-11

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