Woods, Inc. purchased a new engine for a long-distance truck in January, 2021. The engine cost $240,000 and should give the truck an additional 500,000 miles of life. Inadvertently, the engine was charged to truck repairs expense. The error was found in December, 2022. The company records depreciation based on miles driven with no salvage value. Miles driven in 2021 were 80,000 and 70,000 in 2022. Which one of the following entries properly corrects all the errors through December 31, 2022? (Ignore income taxes.) (Round any intermediate calculations and your final answers to the nearest dollar.) Group of answer choices Truck 240,000 Depreciation Expense--Truck (2022) 33,600 Accumulated Depreciation -Truck 72,000 Retained Earnings 201,600 Retained Earnings 201,600 Depreciation Expense (2021) -Truck 38,400 Truck 240,000 Truck 240,000 Accumulated Depreciation - Truck33,600 Retained Earnings 206,400 Truck 240,000 Depreciation Expense (2021) -Truck 38,400 Retained Earnings 278,400

Woods, Inc. purchased a new engine for a long-distance truck in January, 2021. The engine cost $240,000 and should give the truck an additional 500,000 miles of life. Inadvertently, the engine was charged to truck repairs expense. The error was found in December, 2022. The company records depreciation based on miles driven with no salvage value. Miles driven in 2021 were 80,000 and 70,000 in 2022. Which one of the following entries properly corrects all the errors through December 31, 2022? (Ignore income taxes.) (Round any intermediate calculations and your final answers to the nearest dollar.) Group of answer choices Truck 240,000 Depreciation Expense--Truck (2022) 33,600 Accumulated Depreciation -Truck 72,000 Retained Earnings 201,600 Retained Earnings 201,600 Depreciation Expense (2021) -Truck 38,400 Truck 240,000 Truck 240,000 Accumulated Depreciation - Truck33,600 Retained Earnings 206,400 Truck 240,000 Depreciation Expense (2021) -Truck 38,400 Retained Earnings 278,400

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

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 15E: The following are independent errors: a. In January 2019, repair costs of 9,000 were debited to the...

See similar textbooks

Similar questions

Langley Corporation replaced an HVAC system in one of its warehouses in July, 2021, at a cost of $430,000. The accountant recording the purchase charged it to repairs and maintenance expense. The error was discovered late in 2022 while reconciling depreciation expense for 2022. The system should last about 7 years with no salvage value. What entry should be made before the 2022 books are closed if the company uses straight-line depreciation? (Round intermediate calculations to the nearest cent and your final answer to the nearest dollar.) Group of answer choices Warehouse 430,000 Depreciation Expense—Warehouse 61,429 Retained Earnings 491,429 Warehouse 430,000 Depreciation Expense (2022)—Warehouse 61,429 Accumulated Depreciation—Warehouse92,144 Retained Earnings—Prior Period Adjustment 399,285 Warehouse 430,000 Accumulated Depreciation -Warehouse 61,429 Retained Earnings—Prior Period Adjustment 368,571 Retained…
On May 1, 2022, Vontsira purchased equipment for $16,526,000 cash. The production team estimated that the equipment would last for 12 years and have a $826,000 salvage value. Unfortunatelydue to an error, no depreciation was recorded in 2022. The error was corrected when it was discovered at the end of 2023. Which of the following accounts will not be affected by the correction, assuming they use straight-line depreciation? (RE&CF 3) Depreciation Expense Accumulated Depreciation All of these accounts will be affected . Retained Earnings Which of the following is a counterbalancing error? (RE&CF 2) Recording research and development costs as expenses Recording a full year of straight line depreciation when PPE was purchased in August Recording permanent tax differences in deferred taxes Recording interest expense as a decrease to notes payable
At the beginning of the 2025 fiscal year, an inexperienced maintenance technician at Sheffield Company did not check the oil in one of the company cars and the engine burned up. Sheffield replaced the engine at a cost of $8200. The material expenditure is expected to extend the useful life of the car by 3 years. The car had an original cost of $38000 and a 4-year life. The balance in Accumulated Depreciation at the time of the expenditure was $6700. The entry to record the purchase would include a O debit to Equipment-Trucks of $1500. • debit to Accumulated Depreciation of $8200. O debit to Accumulated Depreciation of $6700, O debit to Repairs and Maintenance expense of $8200, h
Yello Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchased on January 1, 2020, at a cost of $299,818. Over its 4-year useful life, the bus is expected to be driven 190,600 miles. Salvage value is expected to be $8,200. (a) X Your answer is incorrect. Compute the depreciable cost per unit. (Round answer to 2 decimal places, e.g. 0.50.) Depreciation cost per unit LA $ 1.40 per mile
Whispering Winds Corp. purchased a delivery truck for $34,000 on January 1, 2022. The truck has an expected salvage value of $5,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years. Actual miles driven were 16,100 in 2022 and 11,700 in 2023. (a1) Your answer is correct. Calculate depreciable cost per mile under units-of-activity method. (Round answer to 2 decimal places, e.g. 0.50.) Depreciable cost .29 per mile eTextbook and Media List of Accounts Attempts: unlimited %24
Blossom Company purchased a delivery truck for $48,000 on July 1, 2025. The truck has an expected salvage value of $8,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years. Actual miles driven were 15,000 in 2025 and 12,000 in 2026. Blossom uses the straight-line method of depreciation. (a) Your answer is partially correct. Compute depreciation expense for 2025 and 2026. Depreciation Expense $ 2025 $ 2026 5,000
Manji
I am so lost on this practice problem, could you please explain what this is asking?
Metlock, Inc. purchased a delivery truck for $30,000 on January 1, 2022. The truck has an expected salvage value of $3,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years. Actual miles driven were 15,400 in 2022 and 12,500 in 2023. Calculate depreciable cost per mile under units-of-activity method.
Chicken Wings Company purchased a copier for P447,150 on January 1, 2021. The estimated useful life of the copier at the time of purchase is 5 years and it has a salvage value of 40,650. On January 1, 2022, the company checked its machineries and found out that the useful life of its copier should have been 6 years. Chicken Wings depreciate its all assets using a straight-line method. How much is the carrying value of Chicken Wing Company’s copier on December 31, 2022?
Consider the following: a. Peters Co. bought a machine for $15,790 on July 1, 2020. The estimated life of the machine was seven years, and salvage value was estimated to be $782. The straight-line depreciation method was used. Compute depreciation expense for 2020. b. Peters Co. bought a machine costing $30,492 on January 1, 2021. A six-year life was estimated with no salvage value. The sum-of-the-years-digits depreciation method was used. Compute depreciation expense for 2025. C. Peters Co. bought a machine costing $62,000 on January 1, 2021. Salvage value was estimated to be $2,000, a five-year life was determined, and 150%-declining-balance depreciation was used, Compute the amount that would be in the accumulated depreciation account on December 31, 2022.
At the beginning of the 2025 fiscal year, an inexperienced maintenance technician at Wildhorse Company did not check the oil in one of the company cars and the engine burned up. Wildhorse replaced the engine at a cost of $9000. The material expenditure is expected to extend the useful life of the car by 3 years. The car had an original cost of $50000 and a 4-year life. The balance in Accumulated Depreciation at the time of the expenditure was $7400. The entry to record the purchase would include a O debit to Repairs and Maintenance expense of $9000. O debit to Accumulated Depreciation of $7400. O debit to Accumulated Depreciation of $9000. O debit to Equipment- Trucks of $1600.