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At the end of 2019, while preparing its financial statements, Blue Ltd. discovered an error in its accounting records. Office furniture with an original cost
At the end of 2019, while preparing its financial statements, Blue Ltd. discovered an error in its accounting records. Office furniture with an original cost of $25,000, a service life of ten years, and a residual value of $8,600 was expensed when it was purchased at the beginning of 2018. The company was subject to an income tax rate of 20%. Ritting used the straight-line method of depreciation for office furniture and follows ASPE. Prepare the journal entries to correct the error and record depreciation for 2019. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit (To record correction of prior year error.) (To record depreciation expense.)
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