Ray Solutions decided to make the following changes in its accounting policies on January 1, 2016:
a. Changed from the cash to the accrual basis of accounting for recognizing revenue on its service contracts.
b. Adopted straight-line depreciation for all future equipment purchases, but continued to use accelerated depreciation for all equipment acquired before 2016.
c. Changed from the LIFO inventory method to the FIFO inventory method.
Required:
For each accounting change Ray undertook, indicate the type of change and how Ray should report the change. Be specific.
Sample solution
Dante Alighieri played a critical role in the literature world through his poem Divine Comedy that was written in the 14th century. The poem contains Inferno, Purgatorio, and Paradiso. The Inferno is a description of the nine circles of torment that are found on the earth. It depicts the realms of the people that have gone against the spiritual values and who, instead, have chosen bestial appetite, violence, or fraud and malice. The nine circles of hell are limbo, lust, gluttony, greed and wrath. Others are heresy, violence, fraud, and treachery. The purpose of this paper is to examine the Dante’s Inferno in the perspective of its portrayal of God’s image and the justification of hell.
In this epic poem, God is portrayed as a super being guilty of multiple weaknesses including being egotistic, unjust, and hypocritical. Dante, in this poem, depicts God as being more human than divine by challenging God’s omnipotence. Additionally, the manner in which Dante describes Hell is in full contradiction to the morals of God as written in the Bible. When god arranges Hell to flatter Himself, He commits egotism, a sin that is common among human beings (Cheney, 2016). The weakness is depicted in Limbo and on the Gate of Hell where, for instance, God sends those who do not worship Him to Hell. This implies that failure to worship Him is a sin.
God is also depicted as lacking justice in His actions thus removing the godly image. The injustice is portrayed by the manner in which the sodomites and opportunists are treated. The opportunists are subjected to banner chasing in their lives after death followed by being stung by insects and maggots. They are known to having done neither good nor bad during their lifetimes and, therefore, justice could have demanded that they be granted a neutral punishment having lived a neutral life. The sodomites are also punished unfairly by God when Brunetto Lattini is condemned to hell despite being a good leader (Babor, T. F., McGovern, T., & Robaina, K. (2017). While he commited sodomy, God chooses to ignore all the other good deeds that Brunetto did.
Finally, God is also portrayed as being hypocritical in His actions, a sin that further diminishes His godliness and makes Him more human. A case in point is when God condemns the sin of egotism and goes ahead to commit it repeatedly. Proverbs 29:23 states that “arrogance will bring your downfall, but if you are humble, you will be respected.” When Slattery condemns Dante’s human state as being weak, doubtful, and limited, he is proving God’s hypocrisy because He is also human (Verdicchio, 2015). The actions of God in Hell as portrayed by Dante are inconsistent with the Biblical literature. Both Dante and God are prone to making mistakes, something common among human beings thus making God more human.
To wrap it up, Dante portrays God is more human since He commits the same sins that humans commit: egotism, hypocrisy, and injustice. Hell is justified as being a destination for victims of the mistakes committed by God. The Hell is presented as being a totally different place as compared to what is written about it in the Bible. As a result, reading through the text gives an image of God who is prone to the very mistakes common to humans thus ripping Him off His lofty status of divine and, instead, making Him a mere human. Whether or not Dante did it intentionally is subject to debate but one thing is clear in the poem: the misconstrued notion of God is revealed to future generations.
References
Babor, T. F., McGovern, T., & Robaina, K. (2017). Dante’s inferno: Seven deadly sins in scientific publishing and how to avoid them. Addiction Science: A Guide for the Perplexed, 267.
Cheney, L. D. G. (2016). Illustrations for Dante’s Inferno: A Comparative Study of Sandro Botticelli, Giovanni Stradano, and Federico Zuccaro. Cultural and Religious Studies, 4(8), 487.
Verdicchio, M. (2015). Irony and Desire in Dante’s” Inferno” 27. Italica, 285-297.
Sample Answer
Sample Answer
Accounting Policy Changes at Ray Solutions: Analysis and Reporting
Ray Solutions made significant accounting policy changes on January 1, 2016, impacting revenue recognition, depreciation methods, and inventory valuation practices. Each change represents a distinct type of accounting change that requires specific reporting to ensure transparency and compliance with accounting standards.
a. Change from Cash to Accrual Basis for Revenue Recognition
Type of Change: Change in Accounting Principle
Ray Solutions transitioning from cash basis to accrual basis for recognizing revenue on service contracts represents a change in accounting principle. This change aims to better match revenues with the periods in which services are provided, providing a more accurate representation of the company’s financial performance.
Reporting the Change:
Ray Solutions should report the change in accounting principle in its financial statements as a retrospective adjustment. This involves restating prior financial statements to reflect the impact of the new accounting principle consistently. The cumulative effect of the change should be disclosed in the footnotes to the financial statements.
b. Adoption of Straight-Line Depreciation for Future Equipment Purchases
Type of Change: Change in Accounting Estimate
Ray Solutions’ decision to adopt straight-line depreciation for all future equipment purchases while maintaining accelerated depreciation for existing equipment represents a change in accounting estimate. This change reflects a shift in management’s judgment regarding the useful lives and depreciation methods for assets.
Reporting the Change:
The adoption of straight-line depreciation for future equipment purchases should be reported prospectively in Ray Solutions’ financial statements. The impact of this change should be reflected in future depreciation expense calculations for newly acquired equipment, while existing equipment continues to be depreciated using the accelerated method.
c. Switch from LIFO to FIFO Inventory Method
Type of Change: Change in Accounting Principle
Ray Solutions’ switch from the Last-In, First-Out (LIFO) inventory method to the First-In, First-Out (FIFO) method constitutes a change in accounting principle. This change alters how inventory costs are assigned and can impact reported inventory values and cost of goods sold.
Reporting the Change:
The switch from LIFO to FIFO inventory method should be reported as a retrospective adjustment in Ray Solutions’ financial statements. Prior financial statements should be restated to reflect the impact of the change consistently. The reasons for the change and its effects on financial performance should be disclosed in the footnotes to the financial statements.
Conclusion
In conclusion, Ray Solutions’ accounting policy changes, including transitioning to accrual basis for revenue recognition, adopting straight-line depreciation for future equipment purchases, and switching from LIFO to FIFO inventory method, represent significant shifts in accounting practices. By identifying the type of change for each policy adjustment and understanding how to report these changes accurately, Ray Solutions can ensure transparency and compliance with accounting standards in its financial reporting.
