Question
Helms Company purchases a delivery truck for $14,400 on January 1 of Year 9. Helms expects to use the truck only two years and to
Helms Company purchases a delivery truck for $14,400 on January 1 of Year 9. Helms expects to use the truck only two years and to sell it for $4,800. The companys policy is to use straight-line depreciation, but depreciation in Year 9 is not recorded. Rather, the accountant charges the entire cost to delivery expense in Year 9. The controller discovers the error late in Year 10. The companys tax rate is 25%.
Required a. Provide the Year 10 entries to record (1) the error correction and (2) depreciation expense for the year. Note: If a line in a journal entry isn't required for the transaction, select "N/A" as the account name and leave the Dr. and Cr. answers blank (zero).
b. Indicate the amounts of the prior period adjustments appearing in the Year 10 retained earnings section of the statement of stockholders equity.
ained earnings section of adjustment to beginning retained earningsStep by Step Solution
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