Equipment was purchased on January 2, 2020, for $24,000, but no portion of the cost has been charged to depreciation. The corporation wishes to use the straight-line method for these assets, which have been estimated to have a life of 10 years and no salvage value. What effect does this error have on net income in 2020? What entry is necessary to correct for this error, assuming that the books are not closed for 2020?
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- Equipment was purchased on January 2, 2017, for $24,000,but no portion of the cost has been charged to depreciation.The corporation wishes to use the straight-linemethod for these assets, which have been estimated tohave a life of 10 years and no salvage value. What effectdoes this error have on net income in 2017? What entry isnecessary to correct for this error, assuming that the booksare not closed for 2017?Jackson Company purchased $50,000 in equipment on July 1, 2021. The equipment had a 10-year useful life (no salvage value) and Jackson normally uses the straight-line method of depreciation with no special first year conventions. The equipment was written off to office expense when purchased, but the error was not discovered until near the end of 2022 (this year is still open). What is the effect of the error on the 2021 and 2022 net income? OA OB OC OD 2021 net income Too high $50.000 2021 net income Too low $50,000 2021 net income Too high $45,000 2021 net income Too low $47,500 2022 net income Too high $5,000 2022 net income Too low $5,000 Lerner 2022 net income Too low $5,000 2022 net income Too high $5,000On January 1, 2019, Uptown Builders purchased a machine for $200,000. Uptown's policy is to depreciate this type of machinery using straight-line depreciation, over five years, with no residual value. Because of a bookkeeping error, no depreciation was recognized in Uptown's 2019 or 2020 financial statements. The error was discovered during the preparation of the 2021 financial statements. Ignoring income taxes, the impact of this error on retained earnings prior to any 2021 adjustments is: Question 8 options: Overstatement of $80,000 Understatement of $120,000 Understatement of $80,000 Overstatement of $120,000
- In 2024, it was discovered that Brandon Irons Metal works had debited expense for the full cost of an asset purchased on January 1, 2021. The cost was $12 million with no expected residual value. Its useful life was 5 years and straight-line depreciation is used by the company. The correcting entry assuming the error was discovered in 2024 before the adjusting and closing entries includes:In 2021, internal auditors discovered that PKE Displays, Inc., had debited an expense account for the $350,000 cost of a machine purchased on January 1, 2018. The machine’s useful life was expected to be five years with no residual value. Straight-line depreciation is used by PKE. Ignoring income taxes, what journal entry will PKE use to correct the error?In 2024, internal auditors discovered that PKE Displays, Incorporated, had debited an expense account for the $350,000 cost of a machine purchased on January 1, 2021. The machine’s useful life was expected to be five years with no residual value. Straight-line depreciation is used by PKE. Ignoring income taxes, prepare the journal entry PKE will use to correct the error (before adjusting and closing entries). Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
- In 2024, internal auditors discovered that PKE Displays, Incorporated, had debited an expense account for the $402,000 cost of a machine purchased on January 1, 2021. The machine’s useful life was expected to be six years with no residual value. Straight-line depreciation is used by PKE. Ignoring income taxes, prepare the journal entry PKE will use to correct the error (before adjusting and closing entries). Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.In 2019, the Hermes Corporation failed to record $8,000 in depreciation expense. The error was discovered in May of 2020. Required. Make the appropriate joumal entry in the books of Hermes Corporation in the year 2020.In 2024, internal auditors discovered that Fay, Incorporated, had debited an expense account for the $700,000 cost of a machine purchased on January 1, 2021. The machine's useful life was expected to be five years with no residual value. Straight-line depreciation is used by Fay. The journal entry to correct the error will include a credit to accumulated depreciation of?
- Langley Corporation replaced an HVAC system in one of its warehouses in July, 2021, at a cost of $430,000. The accountant recording the purchase charged it to repairs and maintenance expense. The error was discovered late in 2022 while reconciling depreciation expense for 2022. The system should last about 7 years with no salvage value. What entry should be made before the 2022 books are closed if the company uses straight-line depreciation? (Round intermediate calculations to the nearest cent and your final answer to the nearest dollar.) Group of answer choices Warehouse 430,000 Depreciation Expense—Warehouse 61,429 Retained Earnings 491,429 Warehouse 430,000 Depreciation Expense (2022)—Warehouse 61,429 Accumulated Depreciation—Warehouse92,144 Retained Earnings—Prior Period Adjustment 399,285 Warehouse 430,000 Accumulated Depreciation -Warehouse 61,429 Retained Earnings—Prior Period Adjustment 368,571 Retained…* Your answer is incorrect. Bramble Company owns equipment that cost $1,026,000 and has accumulated depreciation of $433,200. The expected future net cash flows from the use of the asset are expected to be $620,000. The fair value of the equipment is $456,000. Prepare the journal entry, if any, to record the impairment loss. (If no entry is required, select "No entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List debit entry before credit entry.) Account Titles and Explanation Accumulated Depreciation - Equipment Loss on Impairment eTextbook and Media List of Accounts Debit 592800 0 Credit 0 592800On January 1, 2020, Cullumber Corp. acquired a machine at a cost of $1020000. It is to be depreciated on the straight-line method over a 5-year period with no residual value. Because of a bookkeeping error, no depreciation was recognized in Cullumber's 2020 financial statements. The oversight was discovered during the preparation of Cullumber's 2021 financial statements. Depreciation expense on this machine for 2021 should be $255000. $204000. $408000. $0.