【正文】 ect of the error on Years 1 and 2 should be reflected in the carrying amounts of assets and liabilities as of the beginning of Year 3.b.The financial statements for Years 1 and 2 shoulds net ine for year 2?a.$1,267,700b.$1,314,600c.$1,273,300d.$1,316,00049. On January 1, year 1, Newport Corp. purchased a machine for $100,000. The machine was depreciated using the straightline method over a 10year period with no residual value. Because of a bookkeeping error, no depreciation was recognized in Newport39。s major products or services and its principle markets.d.Disclosure of concentrations when it is reasonably possible that a concentration could cause a severe impact in the near term.41. Althouse Co. discovered that equipment purchased on January 2 salaries$Pension gain$s ine tax rate is 30%. In its Year 3 financial statements, what amount should OffLine report as cumulative effect of change in accounting principle?a.$200,000b.$350,000c.$0d.$500,00013. How should the effect of a change in accounting principle that is inseparable from the effect of a change in accounting estimate be reported?a.By footnote disclosure only.b.By restating the financial statements of all prior periods presented.c.As a correction of an error.d.As a ponent of ine from continuing operations.14. In September, Koff Co.39。1. According to the FASB and IASB conceptual frameworks, the primary users of financial reports include all of the following,s operating plant was destroyed by an earthquake. Earthquakes are rare in the area in which the plant was located. The portion of the resultant loss not covered by insurance was $700,000. Koff39。175,00075,000$for $150,000 was incorrectly expensed at the time. The equipment should have been depreciated over five years with no salvage value. What amount, if any, should be adjusted to Althouse39。s year 1 financial statements, resulting in a $10,000 overstatement of the book value of the machine on December 31, year 1. The oversight was discovered during the preparation of Newport39。s first IFRS reporting period is for the year ended December 31, Year 2. While preparing the Year 2 statement of financial position, management identified an error in which a $90,000 loss accrual was not recorded. $40,000 of the loss accrual related to a Year 1 event and $50,000 related to a Year 2 event. What amount of loss accrual should the pany report in its December 31, Year 1, IFRS statement of financial position?a.$40,000b.$50,000c.$90,000d.$043. Which of the following statements is correct as it relates to changes in accounting estimates?a.Most changes in accounting estimates are accounted for retrospectively.b.It is easier to differentiate between a change in accounting estimate and a change in accounting principle than it is to differentiate between a change in accounting estimate and a correction of an error.c.Whenever it is impossible to determine whether a change in accounting estimate or a change in accounting principle has occurred, the change should be considered a change in estimate.d.Whenever it is impossible to determine whether a change in an estimate or a change in accounting principle occurred, the change should be considered a change in principle.44. Cuthbert Industrials, Inc. prepares threeyear parative financial statements. In Year 3, Cuthbert discovered an error in the previously issued financial statements for Year 1. The error affects the financial statements that were issued in Years 1 and 2. How should the pany report the error?a.The financial statements for Years 1 and 2 should be restated。Officers39。Revaluation surplus from revaluation of fixed assets50,000s operating losses were $600,000 for Year 3 and $50,000 for the period January 1 through January 15, Year 4. Disregarding ine taxes, what amount of net gain (loss) should be reported in Doe39。nots assets on the open market as soon as possible. The division reported net operating losses of $20,000 in December and $30,000 in January. On February 26, Year 2, sale of the division39。nots summary of significant accounting policies in the notes to the financial statements?a.Description of current year equity transactions.b.Summary of longterm debt outstanding.c.Revenue recognition policies.d.Schedule of fixed assets.38. Dean Co. acquired 100% of Morey Corp. prior to Year 3. During Year 3, the individual panies included in their financial statements the following:DeanMorey