The Opal Company Was Incorporated and Began Operations on January

question 117

Essay

The Opal Company was incorporated and began operations on January 1, 2016. Opal used the weighted-average method for costing inventories. Effective January 1, 2017, Opal changed to FIFO for costing inventories and can justify the change. Information related to 2016 and 2017 inventory cost and net income is presented below: $\begin{array}{crr}&2016&2017\\\hline\text { Ending inventory, using: }\\\text { Weighted-average } & \$ 650,000 & \$ 620,000 \\\text { FIFO } & 680,000 & 630,000 \\\text { Net income } & 700,000 & 750,000 \\& \text { (using average) } & \text { (using FIFO) }\end{array}$ Opal's income tax rate is 30% for both 2016 and 2017.
Required:
Calculate the amount of the cumulative effect of the change on beginning retained earnings on January 1, 2017, that would appear on Opal's statement of retained earnings for the year ended December 31, 2017.

Understand the accounting for equipment purchases, including cost, depreciable cost, estimated useful life, and residual value considerations.

Understand the definition and purpose of a will and the legal requirements for its validity.

Recognize the implications of intestacy laws and how property is distributed without a will.

Identify the different types of wills and trusts and their characteristics.

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Definitions:

Financial Resources

Assets in the form of money or other valuables that an individual or organization can draw upon to achieve their goals or objectives.

Stakeholder Elements

The different components or aspects that define stakeholders, including their interests, rights, ownership, and influence on an organization.

Task Environment

The immediate external factors, including competitors, customers, suppliers, and regulatory agencies, that directly affect how an organization operates.

Regulators

Authorities or bodies that have the power to enforce rules and standards within specific industries or areas.