As a certified public accountant, you have been contacted by Joe Davison, CEO of Sports-Pro Athletics, Inc.,
Question:
As a certified public accountant, you have been contacted by Joe Davison, CEO of Sports-Pro Athletics, Inc., a manufacturer of a variety of athletic equipment. He has asked you how to account for the following changes.
1. Sports-Pro appropriately changed its depreciation method for its machinery from the double-declining- balance method to the units-of-production method effective January 1, 2020.
2. Effective January 1, 2020, Sports-Pro appropriately changed the salvage values used in computing depreciation for its office equipment.
3. On December 31, 2020, Sports-Pro appropriately changed the specific subsidiaries constituting the group of companies for which consolidated financial statements are presented.
Instructions
Write a 1–1.5 page letter to Joe Davison explaining how each of the above changes should be presented in the December 31, 2020, financial statements.
Financial StatementsFinancial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... 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:
Mr Joe Davison CEO SportsPro Athletics Inc Dear Mr Davison You recently contacted me about several a...View the full answer
Intermediate Accounting
ISBN: 978-1119503668
17th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfiel
