Adjusting EntriesforDepreciation; Effect of Error

On December 31, a business estimates depreciation on equipment used during the first year of operations to be $14,400.

a.Journalize the adjusting entry required as of December 31.

Dec. 31

b.If the adjusting entry in (a) were omitted, which items would be erroneously stated on the income statement for the year?

Depreciation Expense

Net Income

If the adjusting entry in (a) were omitted, which items would be erroneously stated on the balance sheet as of December 31?

Accumulated Depreciation

Total Assets

Owner's equity