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Exercise 1 1 - 2 6 ( Algo ) Error correction [ L 0 1 1 - 2 , 1 1 - 7 ] In
Exercise Algo Error correction L
In internal auditors discovered that PKE Displays, Incorporated, had debited an expense account for the $ cost of equipment purchased on January The equipment's life was expected to be five years with no residual value. Straightline depreciation is used by PKE.
Required:
Determine the cumulative effect of the error on net income over the threeyear period from through and on retained earnings by the end of
Prepare the correcting entry, assuming the error was discovered in before the adjusting and closing entries. Ignore income taxes.
Assume instead that the equipment was disposed of in and the original error was discovered in after the financial statements were issued. Prepare the correcting entry in
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Determine the cumulative effect of the error on net income over the threeyear period from through and on retained earnings by the end of
tableNet income over the period through isRetained earnings by the end of is
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