Hi can someone help me with these becker questions!? thank you

On January 2, Year 3, to better reflect the variable use of its only machine, Holly, Inc. elected to change its method of depreciation from the straight-line method to the units of production method. The original cost of the machine on January 2 , Year 1. was $50,000, and its estimated life was 10 years. Holly estimates that the machine's total life is 50,000 machine hours. Machine hours usage was 8,500 during Year 2 and 3,500 during Year 1. Holly's income tax rate is 30%. Holly should report the accounting change in its Year 3 financial statements as a(n): Cumulative effect of a change in accounting principle of $2,000 in its income statement. Adjustment to beginning retained earnings of $2,000. Cumulative effect of a change in accounting principle of $1,400 in its income statement. The correct treatment is not provided in any of the answer choices. Tack, Inc. reported a retained earnings balance of $150,000 at December 31, Year 1. In June Year 2, Tack discovered that merchandise costing $40,000 had not been included in inventory in its Year 1 financial statements. Tack has a 30% tax rate. What amount should Tack report as adjusted beginning retained earnings in its statement of retained eamings at December 31, Year 2 ? $190,000$178,000$150,000$122,000 Goddard has used the FIFO method of inventory valuation since it began operations in Year 1. Goddard decided to change to the weighted-average method for determining inventory costs at the beginning of Year 4 . The following schedule shows year-end inventory balances under the FIFO and weighted-average methods: What amount, before income taxes, should be reported in the Year 4 retained earnings statement as the cumulative effect of the change in accounting principle? $5,000 decrease. $3,000 decrease. $2,000 increase. $0 For Year 1, Pac Co. estimated its two-year equipment warranty costs based on $100 per unit sold in Year 1. Experience during Year 2 indicated that the estimate should have been based on $110 per unit. The effect of this $10 difference from the estimate is reported: In Year 2, as income from continuing operations. As an accounting change, net of tax, below Year 2 income from continuing operations. As an accounting change requiring Year 1 financial statements to be restated. As a correction of an error requiring Year 1 financial statements to be restated. In which of the following situations should a company report a prior-period adjustment? A change in the estimated useful lives of fixed assets purchased in prior years. The correction of a mathematical error in the calculation of prior years' depreciation. A switch from the straight-line to double-declining balance method of depreciation. The scrapping of an asset prior to the end of its expected useful life. Scroll down to complete all parts of this task. Jennifer Sanders is the controller for Drexam Co., a manufacturer in the southwestern United States with a December 31 year-end. Sanders and her team have prepared draft financial statements to review with the CFO, Adam Lands. Due to the number of accounting adjustments initiated by Sanders and her team during Year 4 that will impact the financial statements, Sanders has prepared a memorandum highlighting these adjustments along with the draft financials that will be sent to Lands. Using the information in the exhibits, review the memo and determine whether Sanders' memo correctly identifies the classification for each transaction as a change in accounting principle, a change in estimate, or an error correction, and whether she correctly identifies the accounting treatment for each transaction as prospective, retroactive, or a restatement of the financial statement(s). To revise the memo, click on each segment of underlined text below to select the needed correction, if any, from the list provided. If the underlined text is already correct in the context of the memorandum, select [Original text] from the list. For your information and review in advance of our upcoming meeting, I am providing a copy of the company's draft unadjusted balance sheet and draft unadjusted income statement for Years 4 and 3 , along with a summary below of the classification and impact of key accounting entries identified during Year 4, including those we believe to be accounting changes and error corrections we will need to record in the unadjusted financials. At our meeting, I would like to discuss your feedback so we can make adjustments before giving the unaudited financial statements to JRM CPAs, who will be on-site for our annual audit April 3. Blarc Acquisition: The acquisition of Blarc Corp. was approved two weeks ago at a cost of $1,300,000. Because this is a change in reporting entity, we will adjust Years 4 and 3 when we issue our financial statements. Choose an option below: [Original text] Because this is a change in reporting entity, we will adjust Years 4 and 3 when we issue our financial statements. Because this is a change in reporting entity and the transaction is known prior to the issuance of the Year 4 financial statements, we will adjust Year 4 financial statements. The acquisition results in a change in the reporting entity in Year 5 and will be disclosed as a subsequent event in the footnotes to the financial statements for Year 4; however, there is no other impact to Year 4 financials because the acquisition occurred after the current reporting period. Because this is a change in accounting principle, the Year 4 financials will be adjusted because we are adopting a new standard that became effective before the Year 4 financial statements will be issued. Pension Amortization: We have implemented a change to our defined benefit plan accounting whereby we are moving from using the corridor approach for amortization to the full recognition approach. Although this will result in expense volatility from year-to-year, we believe that the more conservative, full recognition approach more closely depicts the financial status of our plan. The effect of this change in accounting principle will be a $195,000 decrease to beginning retained earnings in Year 3, a $117,000 charge to net periodic pension cost in Year 3 and a $208,000 charge to net periodic pension cost in Year 4. Choose an option below: [Original text] change in accounting principle will be a $195,000 decrease to beginning retained earnings in Year 3 , a $117,000 charge to net periodic pension cost in Year 3 , and a $208,000 charge to net periodic pension cost in Year 4. change in accounting principle will result in a retroactive downward adjustment of $490,000 to beginning retained earnings in Year 4. chanqe in accountinq estimate will be a $520,000 charqe to net periodic pension cost in Year 4 . Choose an option below: [Original text] change in accounting principle will be a $195,000 decrease to beginning retained earnings in Year 3, a $117,000 charge to net periodic pension cost in Year 3 , and a $208,000 charge to net periodic pension cost in Year 4. change in accounting principle will result in a retroactive downward adjustment of $490,000 to beginning retained earnings in Year 4 . change in accounting estimate will be a $520,000 charge to net periodic pension cost in Year 4. change in accounting estimate will be a $490,000 charge to net periodic pension cost in Year 4. accounting error will be a $117,000 charge to net periodic pension cost in Year 3 and a $208,000 charge to net periodic pension cost in Year 4 . HC-11 Useful Life and Salvage Value: We will record an adjustment in Year 4 as a result of changing the useful life and salvage value of one of our high-cost machines (model HC-11). Such an adjustment is rare and unusual for Drexam, and the impact of the entry is immaterial to the financials when taken as a whole. The adjustment is treated as a change in accounting principle and will lead to an adjusted cost of $255,000 by the end of Year 4 due to a prospective increase in depreciation expense and accumulated depreciation. Choose an option below: [Original text] a change in accounting principle and will lead to an adjusted cost of $255,000 by the end of Year 4 due to a prospective increase in depreciation expense and accumulated depreciation. a change in accounting estimate in Year 4 and has the financial impact of increasing annual depreciation by $45,000 in future years through the remaining asset term. a change in accounting principle that will be handled prospectively and result in depreciation of $65,000 starting in Year 4. an accounting error that will require a restatement of accumulated depreciation through Year 4 to a XHIBITS Drexam Balance Sheet-Yea... Drexam Income Statement-... External E-mail-Pension Pla... Intemal E-mail-Asset Adjust... Voice Mail Transcript Choose an option below: [Original text] a change in accounting principle and will lead to an adjusted cost of $255,000 by the end of Year 4 due to a prospective increase in depreciation expense and accumulated depreciation. a change in accounting estimate in Year 4 and has the financial impact of increasing annual depreciation by $45,000 in future years through the remaining asset term. a change in accounting principle that will be handled prospectively and result in depreciation of $65,000 starting in Year 4. an accounting error that will require a restatement of accumulated depreciation through Year 4 to a new balance of $350,000. a change in accounting estimate that will require a prospective adjustment and will result in an adjusted balance at year-end for Year 4 of $365,000. XHIBITS Drexam Balance Sheet-Yea... Drexam Income Statement-.. External E-mail-Pension Pla... Internal E-mail-Asset Adjust... Voice Mail Transcript Warranty Expense: During the last quarter, we performed an analysis of warranties paid over the last two years and reevaluated our underlying assumptions for the warranty accrual. Based on our conclusion during Year 4 that warranty expense should increase, and that GAAP requires prospective application as an accounting error, we will see an increase in Year 4 selling expenses of $841,000. Choose an option below: [Original text] prospective application as an accounting error, we will see an increase in Year 4 selling expenses of $841,000. retrospective application as an accounting error, we will see a new Year 4 selling expense total of $5,784,000. prospective application as a change in accounting estimate, we will see a new Year 4 selling expense total of $3,364,000 prospective application as a change in accounting estimate, Year 4 selling expense on the financials will be adjusted to $4,966,000. Choose an option below: [Original text] prospective application as an accounting error, we will see an increase in Year 4 selling expenses of $841,000. retrospective application as an accounting error, we will see a new Year 4 selling expense total of $5,784,000. prospective application as a change in accounting estimate, we will see a new Year 4 selling expense total of $3,364,000. prospective application as a change in accounting estimate, Year 4 selling expense on the financials will be adjusted to $4,966,000. retrospective application as a change in accounting principle, we will see an increase in Year 4 selling expenses of $1,659,000. Impairment on Campuses: Our buildings on our main and satellite campuses carry an original cost of $36,480,000. During Year 4 , we performed an analysis for impairment of these assets, using third-partyprovided comparative data, and concluded that we should recognize an impairment loss on the buildings. Such recognition is an impairment we will record for Year 4 and reevaluate for potential reversal at December 31, Year 5 . Choose an option below: [Original text] an impairment we will record for Year 4 and reevaluate for potential reversal at December 31 , Year 5. a change in reporting entity that will result in our buildings balance decreasing to $29,184,000 for Year 4. a change in accounting estimate that will result in an impairment of $5,836,800 at December 31 , Year 4. a change in accounting estimate that will result in our buildings balance decreasing to $23,347,200 for Choose an option below: [Original text] an impairment we will record for Year 4 and reevaluate for potential reversal at December 31 , Year 5. a change in reporting entity that will result in our buildings balance decreasing to $29,184,000 for Year 4. a change in accounting estimate that will result in an impairment of $5,836,800 at December 31, Year 4. a change in accounting estimate that will result in our buildings balance decreasing to $23,347,200 for Years 4 and 3. a change in accounting principle that will result in our buildings balance increasing for Years 4 and 3. DTA: Finally, we will record an adjustment due to a prior year accounting error that affected temporary tax differences at December 31 , Year 3 . We will treat this as a change in accounting estimate that will result in a deferred tax asset balance of $2,601,000 at the end of Year 4. Choose an option below: [Original text] We will treat this as a change in accounting estimate that will result in a deferred tax asset balance of $2,601,000 at the end of Year 4 . We will treat this as a change in accounting estimate, with a deferred tax adjustment in Year 4 of $189,000. We will treat this as a change in accounting principle, with a retrospective adjustment beginning in Year 5. We will treat this as an accounting error and the deferred tax asset balance will be restated to $2,601,000 for both Years 4 and 3. EXHIBITS Drexam Balance Sheet-Yea... Qxternal E-mail-Pension Pla... Internal E-mail-Asset Adjust... Voice Mail Transcript Choose an option below: [Original text] We will treat this as a change in accounting estimate that will result in a deferred tax asset balance of $2,601,000 at the end of Year 4 . We will treat this as a change in accounting estimate, with a deferred tax adjustment in Year 4 of $189,000. We will treat this as a change in accounting principle, with a retrospective adjustment beginning in Year 5. We will treat this as an accounting error and the deferred tax asset balance will be restated to $2,601,000 for both Years 4 and 3. We will treat this as an accounting error, and the deferred tax asset balance will be adjusted downward by $189,000 for Year 4 only. Once we record all adjustments to the financials as of December 31 , Year 4 , we will then prepare the adjusted financial statements and accompanying footnotes to the financial statements. As required by GAAP, any changes in accounting principle, as described above, will be disclosed in the notes and will include the nature and reason for the change, an explanation of why the new principle is preferable, the impact to income from continuing operations, and the cumulative effect on beginning retained earnings of the earliest period presented. fi: Choose an option below: [Original text] will be disclosed in the notes and will include the nature and reason for the change, an explanation of why the new principle is preferable, the impact to income from continuing operations, and the cumulative effect on beginning retained earnings of the earliest period presented. will be disclosed in the notes and will include the reason for the change, an explanation of why the new principle is preferable, the impact to income from continuing operations, and the cumulative effect on retained earnings for each year presented. will not be disclosed unless the cumulative amount of all related adjustments for changes in XHIBITS \begin{tabular}{ll} Drexam Balance Sheet-Yea.... & Drexam Income Statement-... External E-mail-Pension Pla... \\ \hline Internal E-mail-Asset Adjust... & Voice Mail Transcript \end{tabular} new principle is preferable, the impact to income from continuing operations, and the cumulative effect on retained earnings for each year presented. will not be disclosed unless the cumulative amount of all related adjustments for changes in accounting principle meet the minimum threshold of 5 percent of gross annual revenue for each year presented. will be disclosed in the notes and will include the cumulative effect on beginning retained earnings of the earliest period presented. will be disclosed in the notes and will include an explanation of why the new principle is preferable, the cumulative effect on beginning retained earnings, and a statement that senior management has consulted with the auditor and reached consensus on the appropriate accounting treatment for each adjustment