Explain what impact these errors would have had over the last year and how you will correct them so you can prepare accurate financial statements. Expenditures: • Normal repair and maintenance on the manufacturing facility were capitalized. • The cost of taxes on new equipment used in business operations was expensed. • The shipping costs on new equipment used in business operations were expensed. • The cost of a minor repair on existing equipment used in business operations was capitalized. Assets: • Land next to the production facility held for use next year as a place to build a warehouse was depreciated. • Land held for future resale when the value increases was classified as Property, Plant, and Equipment but not depreciated. • Equipment used in the production process was classified as an investment.
Explain what impact these errors would have had
over the last year and how you will correct them so you can prepare accurate financial statements.
Expenditures:
• Normal repair and maintenance on the manufacturing facility were capitalized.
• The cost of taxes on new equipment used in business operations was expensed.
• The shipping costs on new equipment used in business operations were expensed.
• The cost of a minor repair on existing equipment used in business operations was capitalized.
Assets:
• Land next to the production facility held for use next year as a place to build a warehouse was
• Land held for future resale when the value increases was classified as Property, Plant, and
Equipment but not depreciated.
• Equipment used in the production process was classified as an investment.
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