The following are three independent, unrelated sets of factsrelating to accounting changes.
Situation 1: Sanford Company is in the process of having itsfirst audit. The company has used the cash
basis of accounting for revenue recognition. Sanford president,B. J. Jimenez, is willing to change to the
accrual method of revenue recognition.
Situation 2: Hopkins Co. decides in January 2015 to change fromFIFO to weighted-average pricing for its
inventories.
Situation 3: Marshall Co. determined that the depreciable livesof its fixed assets are too long at
present to fairly match the cost of the fixed assets with therevenue produced. The company decided
at the beginning of the current year to reduce the depreciablelives of all of its existing fixed assets by
5 years.
For each of the situations described, provide the informationindicated below.
(a) Type of accounting change.
(b) Manner of reporting the change under current generallyaccepted accounting principles, including
a discussion where applicable of how amounts are computed.
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