GEN COMBO LOOSELEAF INTERMEDIATE ACCOUNTING; CONNECT ACCESS CARD
9th Edition
ISBN: 9781260089042
Author: J. David Spiceland
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter 20, Problem 20.10BE
Error correction
• LO20–6
In 2018, internal auditors discovered that PKE Displays, Inc., had debited an expense account for the $350,000 cost of a machine purchased on January 1, 2015. The machine’s useful life was expected to be five years with no residual value. Straight-line
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
FIN 6020
v20f
Taylor Toy Corp Ch 11 (11-9)
Taylor Toy Corp. is considering the replacement of it injection molding machine. It is 2 years old but new
technology has it considering the newest model.
The old (current) machine was acquired 2 years ago and is being depreciated on a straight line
basis over 8 years (6 years remaining).The annual depreciation expense is $350 per year, and its
current book value is $2,100. It can be sold for $2,500 today. If the machine is not replaced, it is
expected to be sold for $500 at the end of its remaining life (6 yrs).
The new, replacement machine will cost $8,000. It is expected to be used for 6 years, and is
expected to be sold for $800 then. It will be depreciated using MACRS (5-year class with 2 year
convention).
The new machine is expected to support an increase in sales by $1,000 per year, and with its
improved electrical efficiency, it should reduce operating expenses by $1,500 per year.
Inventories will need to increase by $2,000 and Account…
Question 330J une 2017 (the last day of the financial year Moore Retailers sold one of their office amDuters with an original cost price of R28 500. The computer was sold on credit to one of their am plovees for R7 500. Moore Retailers depreciate all their computers at 30% per year according to the reducing balances method. On 1 July 2016 the accumulated depreciation on the computer was R14 535.Required:Q.3.1 Calculate the profit or loss on the sale of the office computer (Office equipment) by (8) completing the asset disposal account in your answer book.Round all amounts to the nearest rand.Ignore VAT for this question.Q.3.2 Journalise all transactions relating to the sale of the office computer (Office equipment) in the general journal at 30 June 2017.Narrations are not required.gnore VAT for this question.Q.3.3 If Moore Retailers purchased a new computer for R32 775 (including VAT), what amount will be posted to the office equipment account in the general ledger to account for this…
Brlef Exercise 22-06
In 2020, Kingbird Corporation discovered that equipment purchased on January 1, 2018, for $57,000 was expensed at that time. The equipment should have been depreciated over 5
years, with no salvage value. The effective tax rate is 30%. Kingbird uses straight-line depreciation.
Prepare Kingbird's 2020 journal entry to correct the error. (CrediIt account titles are automatically Indented when amount Is entered. Do not Indent manually. If no entry Is
required, select "No Entry" for the account titles and enter0 for the amounts.)
Account Titles and Explanation
Debit
Credit
Chapter 20 Solutions
GEN COMBO LOOSELEAF INTERMEDIATE ACCOUNTING; CONNECT ACCESS CARD
Ch. 20 - Prob. 20.1QCh. 20 - There are three basic accounting approaches to...Ch. 20 - Prob. 20.3QCh. 20 - Lynch Corporation changes from the...Ch. 20 - Sugarbaker Designs Inc. changed from the FIFO...Ch. 20 - Most changes in accounting principles are recorded...Ch. 20 - Southeast Steel, Inc., changed from the FIFO...Ch. 20 - Prob. 20.8QCh. 20 - Its not easy sometimes to distinguish between a...Ch. 20 - For financial reporting, a reporting entity can be...
Ch. 20 - Prob. 20.11QCh. 20 - Describe the process of correcting an error when...Ch. 20 - Prob. 20.13QCh. 20 - If it is discovered that an extraordinary repair...Ch. 20 - Prob. 20.15QCh. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in inventory methods; average cost method...Ch. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in depreciation methods LO203 Irwin, Inc.,...Ch. 20 - Prob. 20.5BECh. 20 - Book royalties LO204 Three programmers at Feenix...Ch. 20 - Warranty expense LO204 In 2017, Quapau Products...Ch. 20 - Change in estimate; useful life of patent LO204...Ch. 20 - Prob. 20.9BECh. 20 - Error correction LO206 In 2018, internal auditors...Ch. 20 - Prob. 20.11BECh. 20 - Error correction LO206 In 2018, the internal...Ch. 20 - Change in principle; change in inventory methods ...Ch. 20 - Change in principle; change in inventory methods ...Ch. 20 - Change from the treasury stock method to retired...Ch. 20 - Change in principle; change to the equity method ...Ch. 20 - Prob. 20.5ECh. 20 - FASB codification research LO202 Access the FASB...Ch. 20 - Change in principle; change in inventory cost...Ch. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in depreciation methods LO203 For...Ch. 20 - Change in depreciation methods LO203 The Canliss...Ch. 20 - Book royalties LO204 Dreighton Engineering Group...Ch. 20 - Loss contingency LO204 The Commonwealth of...Ch. 20 - Warranty expense LO204 Woodmier Lawn Products...Ch. 20 - Prob. 20.15ECh. 20 - Accounting change LO204 The Peridot Company...Ch. 20 - Change in estimate; useful life and residual value...Ch. 20 - Classifying accounting changes LO201 through...Ch. 20 - Error correction; inventory error LO206 During...Ch. 20 - Error corrections; investment LO206 Required: 1....Ch. 20 - Prob. 20.21ECh. 20 - Prob. 20.22ECh. 20 - Prob. 20.23ECh. 20 - Inventory errors LO206 Indicate with the...Ch. 20 - Classifying accounting changes and errors LO201...Ch. 20 - Change in inventory costing methods; comparative...Ch. 20 - P 20-2 Change in principle; change in method of...Ch. 20 - Change in inventory costing methods; comparative...Ch. 20 - Change in inventory methods LO202 The Rockwell...Ch. 20 - Change in inventory methods LO202 Fantasy...Ch. 20 - Change in principle; change in depreciation...Ch. 20 - Depletion; change in estimate LO204 In 2018, the...Ch. 20 - Accounting changes; six situations LO201, LO203,...Ch. 20 - Prob. 20.9PCh. 20 - Inventory errors LO206 You have been hired as the...Ch. 20 - Error correction; change in depreciation method ...Ch. 20 - Accounting changes and error correction; seven...Ch. 20 - Prob. 20.13PCh. 20 - Prob. 20.14PCh. 20 - Prob. 20.15PCh. 20 - Prob. 20.16PCh. 20 - Prob. 20.17PCh. 20 - Integrating Case 201 Change to dollar-value LIFO ...Ch. 20 - Prob. 20.2BYPCh. 20 - Prob. 20.3BYPCh. 20 - Analysis Case 204 Change in inventory methods;...Ch. 20 - Prob. 20.5BYPCh. 20 - Prob. 20.6BYPCh. 20 - Analysis Case 208 Various changes LO201 through...Ch. 20 - Analysis Case 209 Various changes LO201 through...Ch. 20 - Prob. 20.10BYPCh. 20 - Prob. 20.11BYPCh. 20 - Prob. 20.12BYPCh. 20 - Prob. 1CCTC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- 26.3X Harvey DaCosta, a sole trader, purchases on 1 November 2015 a new machine for $18,000. His business year end is 31 October but he cannot decide which method of depreciation he should use in respect of the machine - the straight line method or the reducing balance method. Required: In order to assist him in making his decision, draw up the machine account, and provision for depreciation account, for the three years from 1 November 2015, using: (a) the straight line method (b) the reducing balance method. Each account must indicate which method is being used and must be balanced at the end of each of the three years. Notes: li) In both cases the rate of depreciation is to be 10%. lii) Calculations should be made to the nearest $.arrow_forwardQuestion 8 Link Co. purchased machinery that cost $3,000,000 on January 4, 2019. The entire cost was recorded as an expense. The machinery has a nine-year life and a $200,000 residual value. The error was discovered on December 20, 2021. Ignore income tax considerations.Link's income statement for the year ended December 31, 2021, should show the cumulative effect of this error in the amount of $2,333,333. $2,066,667. $0. $2,377,778.arrow_forwardExercise 11-24 (Algo) Change in principle; change in depreciation methods [LO11-2, 11-6] Alteran Corporation purchased office equipment for $2.2 million at the beginning of 2022. The equipment is being depreciated over a 10-year life using the double-declining-balance method. The residual value is expected to be $700,000. At the beginning of 2024 (two years later), Alteran decided to change to the straight-line depreciation method for this equipment. Required: Prepare the journal entry to record depreciation for the year ended December 31, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars. View transaction list View journal entry worksheet Event 1 No 1 General Journal Depreciation expense Accumulated depreciation Debit Credit Tecnalarrow_forward
- 2241 10/take 2zınh A real estate office using the double-declining-balance method of depreciation purchased office furniture costing $9,000 and put it in use on April 1. The furniture is expected to have a useful life of 10 years and an estimated resale value of $600. Refer to the Real Estate Office scenario. Compute the depreciation expense for April 1 through December 31 of the first tax year and all 12 months of the second and third years. O $4,008 I O $4,200 O $4,104 S4,392arrow_forwardD吗 * 25 26 A Moving to another question will save this responJI Question 14 At December 31, 2017, ABC Corporation's accounting records included the following, before any adjustments: • Accounts Receivable $250,000 (debit) • Allowance for Doubtful Accounts $3,000 (debit) The credit manager's analysis indicates that 6.5% of year-end A/R are uncollectible (i.e., not expected to be collected in cash). After making the appropriate adjusting journal entry on December 31, what are the balances for the Allowance for doubtful accounts and Bad debt expense? O a. Allowance for Doubtful Accounts $16,250, Bad Debt Expense $19,250. O b. Allowance for Doubtful Accounts $16,250, Bad Debt Expense $13,250. O C. Allowance for Doubtful Accounts $16,055 Bad Debt Expense $19,055 O d. Allowance for Doubtful Accounts $16,055 Bad Debt Expense $3,000 10:39 AN 5/5/202 P Type here to search DELL F8 F9 F10 F11 F12 PrtScr Insec F3 F4 F5 F6 FZ Esc F1 F2 II $ % & 8 9arrow_forwardProblems 26-30 assume that a U.S.-based company is issuing securities to foreign investors who require financial statements prepared in accordance with IFRS. Thus, adjustments to convert from U.S. GAAP to IFRS must be made. Ignore income taxes for each problem.Hirsch Company acquired equipment at the beginning of 2017 at a cost of $135,000. The equipment has a five-year life with no expected salvage value and is depreciated on a straight-line basis. At December 31, 2017, Hirsch compiled the following information related to this equipment:a. Determine the appropriate accounting for this equipment for the years ending December 31, 2017, and December 31, 2018, under (1) U.S. GAAP and (2) IFRS.b. Prepare the entry(ies) that Hirsch would make on the December 31, 2017, and December 31, 2018, conversion worksheets to convert U.S. GAAP balances to IFRS. Ignore the possibility of any additional impairment at the end of 2018.arrow_forward
- EXERCISE 9.6 Revision of Depreciation Estimates e LO9-3 Swindall Industries uses straight-line depreciation on all of its depreciable assets. The company records annual depreciation expense at the end of each calendar year. On January 11, 2017, the company purchased a machine costing $90,000. The machine's useful life was estimated to be 12 years with an estimated residual value of $18,00o. Depreciation for partial years is recorded to the nearest full month. In 2021, after almost five years of experience with the machine, management decided to revise its estimated life from 12 years to 20 years. No change was made in the estimated residual value. The revised estimate of the useful life was decided prior to recording annual depreciation expense for the year ended December 31, 2021. a. Prepare journal entries in chronological order for the given events, beginning with the purchase of the machinery on January 11, 2017. Show separately the recording of depreciation expense in 2017 through…arrow_forwardProblem 11-11 (Algo) Error correction; change in depreciation method [LO11-2, 11-6, 11-7] Collins Corporation purchased office equipment at the beginning of 2022 and capitalized a cost of $2,130,000. This cost figure included the following expenditures: Purchase price Freight charges Installation charges Annual maintenance charge Total The company estimated an eight-year useful life for the equipment. No residual value is anticipated. The double-declining-balance method was used to determine depreciation expense for 2022 and 2023. In 2024, after the 2023 financial statements were issued, the company decided to switch to the straight-line depreciation method for this equipment. At that time, the company's controller discovered that the original cost of the equipment incorrectly included one year of annual maintenance charges for the equipment. Required: 1. Ignoring income taxes, prepare the appropriate correcting entry for the equipment capitalization error discovered in 2024. 2.…arrow_forwardEXERCISE I 6 Red Inc. has experienced several poor earnings and has several assets on its books that are undervalued. It desires to revalue its assets and eliminate the deficit. At December 31,2020, the company owns the following identifiable assets: Cost Accumulated Book value Fair value Depreciation Inventory P IM P IM P 0.7M Land 5 M 5 M 6.5 M Buildings 7.5 M Р 3.5 М 4.0 M 5.0 M 1.5 M Machinery & Equipment 3.5 М 2 M 2.2 M The statement of financial position on December 31,2020, reported a deficit of P 2,000,000. REQUIRED: Journal entries to record the quasi-reorganization.arrow_forward
- E 10-9 Acquisition cost; noninterest-bearing note LO3 On January 1, 2013, Byner Company purchased a used tractor. Byner paid $5,000 down and signed a noninterest-bearing note requiring $25,000 to be paid on December 31, 2015. The fair value of the tractor is not determinable. An interest rate of 10% properly reflects the time value of money for this type of loan agreement. The company's financial year-end is December 31. Required: 1. Prepare the journal entry to record the acquisition of the tractor. Round computations to the nearest dollar. 2. How much interest expense will the company include in its 2013 and 2014 income statements for this note? 3. What is the amount of the liability the company will report in its 2013 and 2014 statements of financial position for this note?arrow_forwardExercise 11-05 7 Your answer is partially correct. Try again. Concord Corporation purchased a new machine for its assembly process on August 1, 2020. The cost of this machine was $129,600. The company estimated that the machine would have a salvage value of $12,600 at the end of its service life. Its life is estimated at 5 years, and its working hours are estimated at 20,000 hours. Year-end is December 31. Compute the depreciation expense under the following methods. Each of the following should be considered unrelated. (Round depreciation rate per hour to 2 decimal places, e.g. 5.35 for computational purposes. Round your answers to 0 decimal places, e.g. 45,892.) (a) Straight-line depreciation for 2020 23,400 (b) Activity method for 2020, assuming that machine usage was 800 hours 4,680 (c) Sum-of-the-years'-digits for 2021 39,000 (d) Double-declining-balance for 2021 51,840 Click if you would like to Show Work for this question: Open Show Workarrow_forwardQuestion 40 of 50 View Policies -12 !!! Current Attempt in Progress Cullumber Co. uses straight-line depreciation. Cullumber Co. purchased machinery that cost $3050000 on January 4, 2019. The entire cost was recorded as an expense. The machinery has a 9-year life and a $205000 residual value. The error was discovered on December 20, 2021. Ignore income tax considerations. Before the correction was made, and before the books were closed on December 31, 2021, retained earnings was understated byarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Accounting Changes and Error Analysis: Intermediate Accounting Chapter 22; Author: Finally Learn;https://www.youtube.com/watch?v=c2uQdN53MV4;License: Standard Youtube License