Question 12-error and change estimate Gloria Company purchased a machine on January 1, 2021. Gloria paid $6,000 to the seller for installing the machine and charged the cost to repair expense. The purchase price along with the insurance fee and transportation fee on this machine of $33,000 were recorded as machine and have been depreciated using the straight-line method with an estimated life of 10 years and no residual value. At December 31, 2021, the company decided to change the remaining useful life to be 12 years, starting with January 1, 2022. Requirede Show the entries that Gloria should make to correct its eror in 2022, assuming the book has not been closed and depreciation expense has not yet been recorded for 2022. Gloria reported correct tax payment in its tax retums. Tax rate is 35% for both years.

Question 12-error and change estimate Gloria Company purchased a machine on January 1, 2021. Gloria paid $6,000 to the seller for installing the machine and charged the cost to repair expense. The purchase price along with the insurance fee and transportation fee on this machine of $33,000 were recorded as machine and have been depreciated using the straight-line method with an estimated life of 10 years and no residual value. At December 31, 2021, the company decided to change the remaining useful life to be 12 years, starting with January 1, 2022. Requirede Show the entries that Gloria should make to correct its eror in 2022, assuming the book has not been closed and depreciation expense has not yet been recorded for 2022. Gloria reported correct tax payment in its tax retums. Tax rate is 35% for both years.

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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Question Description The original cost of a machine was $60,000. After $45,000 of depreciation was recorded, the machine was traded in on a new machine of like purpose priced at $75,000. A $10,500 trade-in allowance was received on the old machine and the balance of $64,500 was paid in cash. Prepare the general journal entry to record this trade-in.
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