Listed below are transaction or items that are frequently reported in financial statements. 1. Income effect due

Question:

Listed below are transaction or items that are frequently reported in financial statements.

1. Income effect due to changing from the double-declining-balance method to the straight-line method of depreciation.

2. Collection of accounts receivable.

3. Purchase of an insurance police on December 31 that provides coverage for the following year.

4. accrued wages earned by the employees.

5. Estimated uncollectible accounts receivable using the aging method.

6. Recognized a gain on the sale of plant equipment.

7. Recognized a loss when the government expropriated land for a highway.

8. Declared a dividend valued at $100,000.

9. Under the requirements of a debt covenant, appropriated a portion of retained earnings.

10. Received dividends on stock held as a short-term investment. The dividends were declared and paid on the same day.

11. Recognized the cost of inventory sold during the year under the periodic method.

12. Paid rent for the current year.

(a) Indicate whether each item would be included on the company’s income statement, statement of shareholders’ equity, or neither, using the following codes:

IS Income statement

SEStatement of shareholders’ equity

NNeither

(b) Indicate whether the item you coded IS would be considered (1) usual and frequent, (2) unusual or infrequent, (3) unusual and infrequent, or (other.)

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...