Weaver Textiles Inc

question 131

Essay

Weaver Textiles Inc.has used the straight-line method to depreciate its equipment since it started business in 2012.At the beginning of 2016,the company decided to change to the double-declining-balance (DDB)method.Depreciation as reported and as it would have been reported if the company had always used DDB is listed below:
Required:
What journal entry,if any,should Weaver make to record the effect of the accounting change (ignore income taxes)? Explain.

Define and explain key terms related to dividends and stock transactions, including ex-dividend date, date of record, and homemade dividends.

Understand the financial rationale behind stock repurchases and their effects on shareholders' wealth.

Assess the implications of changes in debt-equity ratio on dividend policy and capital structure.

Interpret the significance and process involving the declaration, payment, and effect on shareholders of regular cash dividends.

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Definitions:

Debit

An accounting entry that results in either an increase in assets or a decrease in liabilities on a company’s balance sheet.

Journalizing

The process of recording business transactions in the accounting journals as part of the bookkeeping process.

Transaction

An agreement or exchange between two parties that is recorded and has an economic impact on the finances of a business.

Journal

A detailed record where all financial transactions of a business are initially recorded, before being transferred to the general ledger.