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Question 9 (12 marks) Assume that you are a senior manager for an accounting firm. Your client is confused about the accounting treatment for the
Question 9 (12 marks) Assume that you are a senior manager for an accounting firm. Your client is confused about the accounting treatment for the following events. Prepare a brief set of notes on the advice and/or recommendations that you would give a client related to the following events and questions. Be sure to include reasons for your recommendations and give 'adjusting' journal entries that would be required, if necessary. Assume a Dec. 31 year end. The company is currently preparing its 2020 financial statements: a) During 2020, the company changed from the double-declining balance method of depreciation for its building to the straight-line method because of the change in the pattern of benefits received. The building cost $1 million in 2018 with no residual value and a 40-year expected life. b) The company is considering changing from the cost model to the revaluation model of measuring the value of its land holdings. c) In 2019, inventory was not written down to the lower of cost and NRV even though actual sales of that inventory made in 2020 indicated impairment. The impairment was $30,000
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