【正文】 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 activities for year 2 included the following:The pany has a 30% effective ine tax rate. What is the pany39。s assets is $800,000, while the fair market value of the assets is $650,000. Conglomeration sold Dingo on February 28, Year 2 for $550,000. Conglomeration39。 an offsetting adjustment to the cumulative effect of the error should be made to the prehensive ine in the Year 3 financial statements.45. Gusto Manufacturing changed its inventory costing method from lastin, firstout (LIFO) to firstin, firstout (FIFO). Assuming there is adequate justification for the change, Gusto would:a.Report the cumulative effect of the change on its ine statement, net of tax, after ine from continuing operations, discontinued operations, and extraordinary items.b.Report the change on its ine statement as a ponent of ine from continuing operations, before tax.c.Report the cumulative effect of the change on its ine statement, net of tax, after ine from continuing operations but before discontinued operations or extraordinary items.d.Report the cumulative effect of the change as an adjustment to beginning retained earnings, net of tax.46. Dingo Dog Food is a ponent of Conglomeration, Inc. and has been losing $50,000 per month. On April 1, Year 1, Conglomeration39。be restated。 financial statements for Year 3 should disclose the fact that the error was made in prior years.c.The financial statements for Years 1 and 2 shouldnots 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。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 3 consolidated financial statements under IFRS?a.$125,000b.$155,000c.$300,000d.$175,00040. Which of the following is not a disclosure requirement related to risks and uncertainties under . GAAP?a.Disclosure of the use of estimates in the preparation of the financial statements.b.Disclosure of significant estimates when it is probable that the estimate will change in the near term, even if the effect of the change will be immaterial.c.Disclosure of an entity39。 expenses20,00010,00050,000 salaries$s Year 3 consolidated financial statements?a.$330,000b.$175,000c.$150,000d.$155,00039. John Co. acquired 100% of George Corp. prior to Year 3. During Year 3, the individual panies included in their financial statements the following:JohnGeorgeLoans to officers125,00050,000Officers39。75,000$Officers39。s prehensive ine?a.$17,000b.$4,000c.$10,000d.$11,00036. Which of the following should be disclosed in a summary of significant accounting policies?a.Depreciation expense.b.Basis of profit recognition on longterm const