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(8 minutes) XYZ Company purchased a Truck on 1/1/19 for $50,000. The company mistakenly expensed the entire cost although the Truck had a 5-year useful
(8 minutes) XYZ Company purchased a Truck on 1/1/19 for $50,000. The company mistakenly expensed the entire cost although the Truck had a 5-year useful life. The error was discovered in 2021 before the boks are closed and depreciation expense was appropriately recorded for the current year. The following accounts would be adjusted in 2021 (ignore income tax effects): Truck $20,000 DR. Accumulated Depreciation $20,000 CR. Depreciation Expense $20,000 DR: Accumulated Depreciation $20,000 CR. Truck $50,000 DR Accumulated Depreciation $20,000 CR, Retained Earnings $30,000 CR. Truck $50,000 DR; Accumulated Depreciation $20,000 CR, Depreciation Expense $30,000 CR
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