1. Hi,
2. Some assistance with these following 10 questions on the effects each scenario would have on Income From Continuing Operationswould be greatly appreciated.

3. SparkyCompanyispreparingits2016financialstatements.IncomefromContinuingOperations(ICO)for2016wasdeterminedtobe$1,000,000,butuponfurtherreview,Sparkysbookkeeperisnotcertainthisnumberisaccurate.

   During2016,Sparkydeclaredpreferreddividendsof$70,000,paid$90,000fordividends,andreceived$135,000fordividendsonavailable-for-saleequitysecurities.ThebookkeeperdidnotincludeanyofthesewhencalculatingICO.

   DeterminetheADJUSTMENTtoSparkysIncomefromContinuingOperations(ICO)forthisitem.Sparkyhasacorporatetaxrateof30%.

   IfyouneedtoincreaseICO,enteryouranswerasapositivenumber;forinstance:3000

   IfyouneedtodecreaseICO,enteryouranswerasanegativenumber;forinstance:-3000

   IfyoudeterminenochangeisneededtoICO;enter0

4. 1.5 points

QUESTION 2

1. Over the past 4 years, SPARKY has estimated bad debts based on 3.5% of credit sales. On May 1, 2016, after reviewing their major clients credit worthiness, they decided to change this estimate to 4.75%. If Sparky had used the 4.75% in the past, bad debt expenses would be $150,000 higher in prior years. During fiscal 2016, Sparky had earned sales revenues of $2,750,000 of which 20% were cash sales and 80% were credit sales. The bookkeeper calculated bad debt expenses for 2016 using the 3.5%.

   Determine the ADJUSTMENT to Sparkys Income from Continuing Operations (ICO) for this item.Sparky has a corporate tax rate of 30%.

   If you need to increase ICO, enter your answer as a positive number; for instance: 3000

   If you need to decrease ICO, enter your answer as a negative number; for instance: -3000

   If you determine no change is needed to ICO; enter 0

2. 1.5 points

QUESTION 3

1. On April 1, 2014, Sparky purchased a truck for $50,000 with a salvage value of $7,000 and useful life of 5 years which was depreciated using the straight line method. On October 1, 2016, Sparky decided to change the salvage to $3,630 and a total useful life of 9 years. The bookkeeper has not recorded any depreciation on the truck for 2016.

   Determine the ADJUSTMENT to Sparkys Income from Continuing Operations (ICO) for this item.Sparky has a corporate tax rate of 30%.

   If you need to increase ICO, enter your answer as a positive number; for instance: 3000

   If you need to decrease ICO, enter your answer as a negative number; for instance: -3000

   If you determine no change is needed to ICO; enter NE.

2. 1.5 points

QUESTION 4

1. On July 1, 2012, Sparky purchased a machine for $200,000 with a salvage value of $8,000 and useful life of 20 years which was depreciated using the straight line method. On July 1, 2016, Sparky decided to change the salvage to $14,255 and a total useful life of 28 years. The bookkeeper used the old estimates in calculating ICO.

   Determine the ADJUSTMENT to Sparkys Income from Continuing Operations (ICO) for this item.Sparky has a corporate tax rate of 30%.

   If you need to increase ICO, enter your answer as a positive number; for instance: 3000

   If you need to decrease ICO, enter your answer as a negative number; for instance: -3000

   If you determine no change is needed to ICO; enter NE.

2. 1.5 points

QUESTION 5

1. On July 1, 2012, Sparky purchased a plot of land for $158,500, but the bookkeeper incorrectly classified it and depreciated it as a building. The bookkeeper determined it had a $10,000 salvage value and a 15 year useful life and has used straight line depreciation since the day of purchase. The bookkeeper discovered this mistake in 2016 and has did not record any depreciation for this asset in 2016.

   Determine the prior period adjustment to Retained Earnings that Sparky will record in a journal entry for 2016.Sparky has a corporate tax rate of 30%.

   If you need to increase RE, enter your answer as a positive number; for instance: 3000

   If you need to decrease RE, enter your answer as a negative number; for instance: -3000

   If you determine no change is needed to RE; enter 0

2. 1.5 points

QUESTION 6

1. On May 1, 2013, Sparky received $337,800 for the sale of merchandise to a customer. The contract specified that Sparky would deliver their product in equal monthly quantities over 60 months. When Sparky recorded the sale the bookkeeper credited a nominal account. No adjusting or correcting entries were made and the bookkeeper realized the error after 2016 ICO was calculated.

   Determine the ADJUSTMENT to Sparkys Income from Continuing Operations (ICO) for this item.Sparky has a corporate tax rate of 30%.

   If you need to increase ICO, enter your answer as a positive number; for instance: 3000

   If you need to decrease ICO, enter your answer as a negative number; for instance: -3000

   If you determine no change is needed to ICO; enter 0

2. 1.5 points

QUESTION 7

1. Using the information in Question 6, determine the prior period adjustment to Retained Earnings that Sparky will record in 2016.Sparky has a corporate tax rate of 30%.

   If you need to increase RE, enter your answer as a positive number; for instance: 3000

   If you need to decrease RE, enter your answer as a negative number; for instance: -3000

   If you determine no change is needed to RE; enter 0

2. 1.5 points

QUESTION 8

1. Sparky began doing business on January 1, 2012 using the Percentage of Completion to record construction revenues. During 2016, Sparky changed to the Completed Contract Method to record construction revenues to be consistent with industry practice. The bookkeeper used the Completed Contract Method for recording construction revenues in 2016. The company compiled the following comparative data:

   	Percentage of Completion Method	Completed Contract Method
   2012	$ 600,000	$ 387,500
   2013	$ 545,500	$ 322,500
   2014	$ 537,500	$ 385,000
   2015	$ 512,500	$ 395,000
   2016	$685,000	$ 415,000

   Determine the ADJUSTMENT to Sparkys Income from Continuing Operations (ICO) for this item.Sparky has a corporate tax rate of 30%.

   If you need to increase ICO, enter your answer as a positive number; for instance: 3000

   If you need to decrease ICO, enter your answer as a negative number; for instance: -3000

   If you determine no change is needed to ICO; enter 0

2. 1.5 points

QUESTION 9

1. Using the information in Question 8, determine the cumulative effect adjustment to Retained Earnings that Sparky will recognize in the journal entry to record this accounting change.Sparky has a corporate tax rate of 30%.

   If you need to increase RE, enter your answer as a positive number; for instance: 3000

   If you need to decrease RE, enter your answer as a negative number; for instance: -3000

   If you determine no change is needed to RE; enter 0

2. 1.5 points

QUESTION 10

1. Sparky reports 3 years of comparative financial statements (2016, 2015, and 2014). Using the information in Question 8, determine the cumulative effect adjustment to Retained Earnings that Sparky will recognize in the comparative financial statements to record this accounting change.Sparky has a corporate tax rate of 30%.

   If you need to increase RE, enter your answer as a positive number; for instance: 3000

   If you need to decrease RE, enter your answer as a negative number; for instance: -3000

   If you determine no change is needed to RE; enter 0