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
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Question 12-rerror 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 error 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 returns. Tax rate is 35% for both years.
Transcribed Image Text:Question 12-rerror 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 error 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 returns. Tax rate is 35% for both years.
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