Jasper Corporation Is Preparing Its Year-End Financial Statements and Needs

question 4

Essay

Jasper Corporation is preparing its year-end financial statements and needs your assistance evaluating the following items:
1. When recording the current year depreciation expense, the controller noticed that depreciation expense recorded in the prior year did not consider the residual value into the calculation.
2. Management has decided to change the method used to depreciate the company's equipment from double-declining balance to straight-line method because of a change in the pattern of benefits received from the assets.
3. Management has changed the rate used to calculate the company's estimated warranty liability.
4. After defending a legal dispute relating to its patent, the company reduced the patent's amortization period.
Instructions
a) Analyze each of the four events described above and identify the type of accounting change that has occurred.
b) Indicate whether each event above should be accounted for retrospectively or prospectively.

---

Definitions:

Innate Basis

An inherent or natural underlying foundation or tendency, often referring to abilities or instincts present from birth.

Grammar

The system of rules that determine how our thoughts can be expressed.

Egocentric Speech

Speech used by children, in which they talk about themselves and their perspective, often without regard for the listener's understanding or viewpoint.

Fast Mapping

The process in which new words are associated with their meaning after only a brief encounter.