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SWFT Essntl Tax Individ/Bus Entities 2020

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter5: Business Deductions

Section: Chapter Questions

Problem 10CE

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What would the net profit be after adjusting for this error ? General accounting

A company's income statement for the year ended December
31, 20X5 showed a net profit of $180,000. It was discovered
that $32,000 paid for the purchase of manufacturing
equipment had been incorrectly debited to repairs expense
account. The company's policy is to depreciate manufacturing
equipment at 15% per year using the straight-line method,
with a full year's depreciation charged in the year of
acquisition.
What would the net profit be after adjusting for this error?

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