For Each of the Following Scenarios,determine the Effects (If Any)of

question 12

Essay

For each of the following scenarios,determine the effects (if any)of the accounting change (correction of error,change in accounting policy,or change in estimate)on the relevant asset or liability,equity,and comprehensive income in the year of change and the prior year.Use the following table for your response:
a.Company A increases the allowance for doubtful accounts (ADA).Using the old estimate,ADA would have been $45,000.The new estimate is $50,000.
b.Company B omitted to record an invoice for a $10,000 sale made on credit at the end of the previous year and incorrectly recorded the sale in the current year.The related inventory sold has been accounted for.
c.Company C changes its revenue recognition to a more conservative policy.The result is a decrease in prior-year revenue by $4,000 and a decrease in current-year revenue by $5,000 relative to the amounts under the old policy.

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Definitions:

Metamorphic Conditions

The environmental conditions, including heat, pressure, and chemical processes, that transform the mineral composition and structure of a rock.

Contact Metamorphism

A type of metamorphism that occurs when rocks are heated and chemically altered by close contact with hot magma or lava.

Shallow Levels

Areas near the Earth's surface or at a minimal depth below it.

Crust

The outermost layer of the Earth, consisting of solid rocks, and subdivided into the continental and oceanic crust.