Module 10 Assignment: Accounting Changes and Error Corrections

For this assignment, you will apply the concepts learned in Module 10 to identify, account for, and disclose accounting changes and error corrections. You will perform calculations, prepare journal entries, and provide necessary disclosures to demonstrate your understanding of these topics. You can continue using the accounting simulator from our website, MS Excel, or an inexpensive accounting software if you have access to it.

Assignment Tasks

1. Accounting Changes:
   • Identify and account for the following changes in accounting principle:
     • Change from the first-in, first-out (FIFO) method to the last-in, first-out (LIFO) method for inventory valuation.
     • Change from the straight-line method to the declining balance method for depreciation.
   • Prepare the journal entries to reflect the retrospective application of these changes.
   • Provide the necessary disclosures for each accounting change, including the nature of the change, the reason for the change, and the effect on the financial statements.
2. Accounting Estimates:
   • Identify and account for the following changes in accounting estimates:
     • Revision of the estimated useful life of an asset from 10 years to 8 years.
     • Adjustment of the estimated amount of uncollectible receivables from 2% to 3% of total accounts receivable.
   • Prepare the journal entries to reflect the prospective application of these changes.
   • Provide a brief explanation of the impact of these changes on the financial statements.
3. Accounting Errors:
   • Identify and correct the following accounting errors:
     • A sales transaction of $5,000 was not recorded (Error of Omission).
     • The rent expense of $1,000 was recorded as $100 (Error of Commission).
     • Office supplies expense of $500 was capitalized as an asset (Error in Principle).
   • Prepare the journal entries to correct these errors for the current period and restate prior period financial statements as necessary.
   • Provide the necessary disclosures for each error, including the nature of the error, the impact on the financial statements, and the method of correction.

Submission Instructions

Compile your calculations, journal entries, and disclosures into a single document. Submit your document in PDF format via the course submission portal.

Additional Activities

• Discussion Post: Share your experience in the course forum, detailing any challenges you faced during the assignment and how you overcame them. Provide feedback on your classmates’ posts.
• Peer Review: Review at least two of your classmates’ submissions and provide constructive feedback. Focus on the accuracy of the calculations, the clarity of the journal entries, and the completeness of the disclosures.

Due Date: One week after completing this module.

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