Assignment Gradebook ORION Downloadable eTex The founder, president, and major shareholder of Dewitt Corp. recently sold his controlling interest in the company to a national distributor in the same line of business. The change in ownership was effective June 30, 2017, halfway through Dewitt's current fiscal year During the due diligence process of acquiring the company and over the last six months of 2017, the new senior management team had a chance to review the company's accounting records and policies. Dewitt follows ASPE. Although EPS are IFRS guidelines. By the end of 2017, the following decisions had been made. not part of ASPE, management calculates EPS for its own purposes and applies the Dewitt's policy of expensing all interest as incurred assets is capitalized. This policy will be applied retrospectively, and going of this policy is to reduce interest expense in 2 in 2016. Dewitt uses straight-line depreciation for equipment and a five-year life. Because the interest has already been deducted for tax purposes, the change in policy results in a taxable temporary difference 1. will be changed to correspond to the policy of the controlling shareholder whereby Interest on self forward it will simplify the consolidation process for the parent company. The major effect 015 by $9,350 and to increasethe cost of equipment bythe same amount. The equip et was put into service early Deferred development costs of $12,900 remained in long-term assets at December 31, 2016. These were being written off on a straight-line besis with another three years remaining at that time. On reviewing the December 31, 2017 balances (after an additional year of depreciation), management decided that there were no further benefits to be received from these deferrals and there likely had not been any benefits for the past two years. The original costs were tax deductible when incurred 2. 3. A long-term contract with a preferred customer was completed in December 2017. When discussing payment with the customer, it came to light that a down payment of $34,000 made by the customer on the contract at the end of 2015 had been taken into revenue when received. The revenue should have been recognized in 2017 on completion of the contract. were as follows at December 31, 2016 and 2017, before any corrections related to the information above. The December 31, Dewitt's financial statements (summarized 2017 statements are in draft form only and the 2017 accounts have not yet DEWITT CORP Statement of Financial Position 31 2017 2016 Liabilities and Shareholders' Equity 2017 2016 Assets Current assets $192,300 $168,400 Current liabilities Long-term assets 322,000 311,000 Long-term liabilities $117,000 $103,000 166,000 153,000 All Rights Assignment Gradebook ORION Downloadable eTex The founder, president, and major shareholder of Dewitt Corp. recently sold his controlling interest in the company to a national distributor in the same line of business. The change in ownership was effective June 30, 2017, halfway through Dewitt's current fiscal year During the due diligence process of acquiring the company and over the last six months of 2017, the new senior management team had a chance to review the company's accounting records and policies. Dewitt follows ASPE. Although EPS are IFRS guidelines. By the end of 2017, the following decisions had been made. not part of ASPE, management calculates EPS for its own purposes and applies the Dewitt's policy of expensing all interest as incurred assets is capitalized. This policy will be applied retrospectively, and going of this policy is to reduce interest expense in 2 in 2016. Dewitt uses straight-line depreciation for equipment and a five-year life. Because the interest has already been deducted for tax purposes, the change in policy results in a taxable temporary difference 1. will be changed to correspond to the policy of the controlling shareholder whereby Interest on self forward it will simplify the consolidation process for the parent company. The major effect 015 by $9,350 and to increasethe cost of equipment bythe same amount. The equip et was put into service early Deferred development costs of $12,900 remained in long-term assets at December 31, 2016. These were being written off on a straight-line besis with another three years remaining at that time. On reviewing the December 31, 2017 balances (after an additional year of depreciation), management decided that there were no further benefits to be received from these deferrals and there likely had not been any benefits for the past two years. The original costs were tax deductible when incurred 2. 3. A long-term contract with a preferred customer was completed in December 2017. When discussing payment with the customer, it came to light that a down payment of $34,000 made by the customer on the contract at the end of 2015 had been taken into revenue when received. The revenue should have been recognized in 2017 on completion of the contract. were as follows at December 31, 2016 and 2017, before any corrections related to the information above. The December 31, Dewitt's financial statements (summarized 2017 statements are in draft form only and the 2017 accounts have not yet DEWITT CORP Statement of Financial Position 31 2017 2016 Liabilities and Shareholders' Equity 2017 2016 Assets Current assets $192,300 $168,400 Current liabilities Long-term assets 322,000 311,000 Long-term liabilities $117,000 $103,000 166,000 153,000 All Rights