The following paragraphs describe fraudulent accounting committed by the company Rite-Aid in 1999. After reading the paragraphs, list the journal entries you think Rite-Aid would have used to do what is described here. You will have to make an educated guess as to what journal entries the company would use to cover up the fraud. Rite Aid retroactively increased the estimated lives (periods of time) over which some groups of assets were depreciated. These retroactive depreciation changes violated GAAP, which requires such changes to be done prospectively. There was no legitimate business purpose or supporting documentation for these changes. The effect of the retroactive depreciation changes resulted in increases to income, and caused some asset groups to have a negative depreciation expense. These changes resulted in an approximately $14.6 million overstatement of FY 1998 pre-tax income.
The following paragraphs describe fraudulent accounting committed by the company Rite-Aid in 1999. After reading the paragraphs, list the
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