Cullumber Company discovered an error while preparing its 2025 financial statements. A building constructed at the beginning of 2024 costing $1230000 has not been depreciated. The estimated useful life of the building is 30 years with no salvage value. Straight-line depreciation is used. Cullumber properly included depreciation on its return also using straight-line depreciation. Income tax payable was also reported correctly at a tax rate of 20%. Income before depreciation expense in 2025 was $330000. What is the appropriate journal entry to record the prior period adjustment? Retained Earnings Deferred Tax Liability Accumulated Depreciation Retained Earnings Accumulated Depreciation Retained Earnings Deferred Tax Asset Accumulated Depreciation 41000 41000 32800 8200 8200 32800 41000 41000

Cullumber Company discovered an error while preparing its 2025 financial statements. A building constructed at the beginning of 2024 costing $1230000 has not been depreciated. The estimated useful life of the building is 30 years with no salvage value. Straight-line depreciation is used. Cullumber properly included depreciation on its return also using straight-line depreciation. Income tax payable was also reported correctly at a tax rate of 20%. Income before depreciation expense in 2025 was $330000. What is the appropriate journal entry to record the prior period adjustment? Retained Earnings Deferred Tax Liability Accumulated Depreciation Retained Earnings Accumulated Depreciation Retained Earnings Deferred Tax Asset Accumulated Depreciation 41000 41000 32800 8200 8200 32800 41000 41000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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