In an examination of Garganta Limited as at December 31, 2023, you have learned about the following situations. No entries have been made in the accounting records for these items.

1. The corporation erected its present factory building in 2007. Depreciation was calculated using the straightline method, based on an estimated life of 35 years. Early in 2023, the board of directors conducted a careful survey and estimated that the factory building had a remaining useful life of 25 years as at January 1, 2023.

2. An additional assessment of 2022 corporate income tax was levied and paid in 2023.

3. When calculating the accrual for officers salaries at December 31, 2023, it was discovered that the accrual for officers salaries for December 31, 2022, had been overstated.

4. On December 15, 2023, Garganta declared a common shares dividend of $1 per share on its issued common shares outstanding, payable February 1, 2024, to the common shareholders of record on December 31, 2023.

5. Garganta, which is on a calendaryear basis, changed its inventory cost formula as at January 1, 2023. The inventory for December 31, 2022, was costed using the weighted average method, and the inventory for December 31, 2023, was costed using the FIFO method.

6. On January 15, 2024, Gargantas warehouse containing raw materials was damaged by a flash flood.

7. During December 2023, the former president retired and a new president was appointed.

8. Garganta suffered a loss from a former employee stealing cash from a deposit of cash sales in the first quarter of the year. The amount has been a reconciling item on the bank reconciliation ever since the theft. Garganta has not yet made any journal entry.

Instructions

Describe fully how each item above should be reported in the financial statements of Garganta for the year 2023.

Question

In an examination of Garganta Limited as at December 31, 2023, you have learned about the following situations. No entries have been made in the accounting records for these items.

1. The corporation erected its present factory building in 2007. Depreciation was calculated using the straightline method, based on an estimated life of 35 years. Early in 2023, the board of directors conducted a careful survey and estimated that the factory building had a remaining useful life of 25 years as at January 1, 2023.

2. An additional assessment of 2022 corporate income tax was levied and paid in 2023.

3. When calculating the accrual for officers salaries at December 31, 2023, it was discovered that the accrual for officers salaries for December 31, 2022, had been overstated.

4. On December 15, 2023, Garganta declared a common shares dividend of $1 per share on its issued common shares outstanding, payable February 1, 2024, to the common shareholders of record on December 31, 2023.

5. Garganta, which is on a calendaryear basis, changed its inventory cost formula as at January 1, 2023. The inventory for December 31, 2022, was costed using the weighted average method, and the inventory for December 31, 2023, was costed using the FIFO method.

6. On January 15, 2024, Gargantas warehouse containing raw materials was damaged by a flash flood.

7. During December 2023, the former president retired and a new president was appointed.

8. Garganta suffered a loss from a former employee stealing cash from a deposit of cash sales in the first quarter of the year. The amount has been a reconciling item on the bank reconciliation ever since the theft. Garganta has not yet made any journal entry.

Instructions

Describe fully how each item above should be reported in the financial statements of Garganta for the year 2023.