Answered step by step
Verified Expert Solution
Question
1 Approved Answer
George Young Industries (GYI) acquired industrial robots at the beginning of 2010 and added them to the companys assembly process. During 2013, management became aware
George Young Industries (GYI) acquired industrial robots at the beginning of 2010 and added them to the companys assembly process. During 2013, management became aware that the $1 million cost of the machinery was inadvertently recorded as repair expense on GYIs books and on its income tax return. The industrial robots have 10-year useful lives and no material salvage value. This class of equipment is depreciated by the straight-line method for financial reporting purposes and for tax purposes it is considered to be MACRS 7-year property (cost deducted over 7 years by the modified accelerated recovery system as follows): Year MACRS Deductions 2010 $ 142,900 2011 244,900 2012 174,900 2013 124,900 2014 89,300 2015 89,200 2016 89,300 2017 44,600 Totals $ 1,000,000 The tax rate is 40% for all years involved. Required: 1. Prepare any journal entry necessary as a direct result of the error described. 2.? need any??? 3. Prepare the adjusting entry for 2013 depreciation
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started