Question
George Young Industries (GYI) acquired industrial robots at the beginning of 2018 and added them to the companys assembly process. During 2021, management became aware
George Young Industries (GYI) acquired industrial robots at the beginning of 2018 and added them to the companys assembly process. During 2021, management became aware that the $1.9 million cost of the equipment 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.
Year MACRS Deductions
2018 $271,510
2019 $465,310
2020 $332,210
2021 237,310
2022 169,670
2023 169,480
2024 169,670
2025 84,740
Totals $1,900,000
The tax rate is 25% for all years involved. Required: 1. & 3. Prepare any journal entry necessary as a direct result of the error described and the adjusting entry for 2021 depreciation. 2. Will GYI account for the change (a) retrospectively or (b) prospectively?
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Ebook Principles Of Financial Accounting
Authors: John Wild, Ken Shaw, Barbara Chiappetta
2nd Edition
0077166183, 9780077166182
