80.2K

Verified Solution

Link Copied!

please answer, options given in last 2 images

On January 2, Vadiso, Inc., hired Dalton to be its controller. During the year, Dalton, working closely with Vadiso's president and outside accountants, made changes in accounting policies, corrected several errors dating from previous years, and instituted new accounting policies. Vadiso's current-year financial statements will be presented in comparative form with its prior-year financial statements. Items 1 through 5 represent Vadiso's transactions. Select from the option lists provided the (1) correct classification and (2) appropriate accounting treatment for each of Vadiso's transactions below. Each choice may be used once, more than once, or not at all. Transaction Classification Accounting treatment 110 111 1. Vadiso has determined that the percentage of receivables deemed to be uncollectible is materially understated. 2. During the current year, Vadiso determined that an insurance premium paid and entirely expensed in the previous year was for the 2- year period from January 1 of the previous year through January 1 of the next year. 3. Vadiso properly consolidated an investee that was previously accounted for appropriately using the equity method. 4. Vadiso instituted a pension plan for all employees in the current year. Vadiso had not previously had a pension plan. 5. During the current year, Vadiso transferred held-to- maturity securities to the available-for-sale category. 110 mo E Select an option below O Change in accounting principle Change in accounting estimate Correction of an error in previously presented financial statements Neither an accounting change nor the correction of an accounting error Change in the reporting entity Select an option below Retrospective application Prospective approach

Answer & Explanation Solved by verified expert

See Answer