Red Hawk Logistics reported a net profit of $95,200 for the year ended December 31, 20X4. Later, it was discovered that $22,000 paid for a delivery truck was mistakenly debited to the vehicle maintenance expense account. The company's accounting policy is to depreciate delivery trucks at 20% per year on the straight-line basis, applying a full year's depreciation in the year of acquisition. What is the corrected net profit after adjusting for this error?

Red Hawk Logistics reported a net profit of $95,200 for the year ended December 31, 20X4. Later, it was discovered that $22,000 paid for a delivery truck was mistakenly debited to the vehicle maintenance expense account. The company's accounting policy is to depreciate delivery trucks at 20% per year on the straight-line basis, applying a full year's depreciation in the year of acquisition. What is the corrected net profit after adjusting for this error?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 7E: Loban Company purchased four cars for 9,000 each and expects that they will be sold in 3 years for...

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