Complete the Following Table by Selecting the Appropriate Type of Change

question 49

Essay

Complete the following table by selecting the appropriate type of change and the accounting method appropriate for each event.
$$\begin{array} { | l | l | l | } \hline { \text { Event } } & \text { Type of Change } & \text { Accounting Method } \\\hline \text { Change from LIFO to FIFO. } & & \\\hline \text { Change in the warranty expense } & & \\\text { provision. } & & \\\hline \begin{array} { l } \text { Change from completed- } \\\text { contract to percentage-of- } \\\text { completion method. }\end{array} & & \\\hline \begin{array} { l } \text { Purchase of a new subsidiary } \\\text { with } 60 \% \text { ownership that is five } \\\text { years old. }\end{array} & & \\\hline \text { Change from reporting } & & \\\text { inventory from the aggregate } & & \\\text { method to the individual item } & & \\\text { method. } & & \\\hline \text { Change in the life and salvage } & & \\\text { value of a depreciable asset. } & & \\\hline \text { Change from straight-line to } & & \\\text { declining balance depreciation. } & & \\\hline\end{array}$$

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Definitions:

Functional Currency

The currency of the primary economic environment in which an entity operates, most often used in measuring its financial performance and position.

Capital Assets

Long-term assets acquired or owned by a company, used in its operations and not expected to be converted into cash within a year.

Exchange Rates

The price at which one country's currency can be converted into another's, critical for international trade and finance.

Amortization Expense

The portion of the cost of an intangible asset that is allocated as an expense in a company's income statement over a set period.