$($b$)$

Prepare the required journal entries to record any adjustments. $($List all debit entries before credit

entries. Credit account titles are automatically indented when the amount is entered. Do not

indent manually. If no entry is required, select $"$No Entry" for the account titles and enter $0$ for

the amounts.$)$

No$.$ Account Titles and Explanation

Debit

$]$

$1$

$1$

It is December $2023$ and Sheridan Inc. recently hired a new accountant, Jodie Larson. Although Sheridan is a

private company, it follows IFRS. As part of her preparation of the $2023$ financial statements for Sheridan,

Jodie has proposed the following accounting changes:

At December $31,2022,$ Sheridan had a receivable of $$215,000$ from Michael Inc. on its statement of

financial position that had been outstanding since mid$-2021.$ In December $2023,$ Michael was

declared bankrupt and no recovery is expected. Jodie proposes to write off the receivable in $2023$

against retained earnings to correct a $2021$ error.

Jodie proposes to change from double$-$declining$-$balance to straight$-$line depreciation for the

company's manufacturing assets because of a change in the pattern in which the assets provide

benefits to the company. If straight$-$line depreciation had been used for all prior periods, retained

earnings would have been $$327,488$ higher at December $31,2022.$ The change's effect just on $2023$

income is a $$41,968$ reduction.

For equipment in the leasing division, Jodie proposes to adopt the sum$-$of$-$the$-$years'$-$digits

depreciation method, which the company has never used before. Sheridan began operating its

leasing division in $2023.$ If straight$-$line depreciation were to be used, $2023$ income would be

$$94,600$ higher.

Sheridan has decided to adopt the revaluation method for reporting and measuring its land, with this

policy being effective from January $1,2023.$ At December $31,2022,$ the land's fair value was

$$774,000.$ The land's book value at December $31,2022,$ was $$645,000.($Hint: Refer to IAS $8$ for the

treatment of this specific change in policy.$)$

Sheridan has investments that are recorded at fair value through other comprehensive income $($FV$-$

OCl $).$ At December $31,2022,$ an error was made in the calculation of the fair values of these

investments. The amount of the error was an overstatement of the fair value by $$172,000.$

Sheridan's income tax rate is $30\%.$

$($a$)$