Question
In 2021, the internal auditors of Lee Manufacturing discovered the following material errors made in prior years: 1. On June 30, 2019, the purchase of
In 2021, the internal auditors of Lee Manufacturing discovered the following material errors made in prior years: 1. On June 30, 2019, the purchase of equipment was incorrectly recorded as a debit to repair and maintenance expense. The equipment cost $50,000 and has a useful life of five years and no residual value. 2. On April 30, 2020, $75,000 was paid to a contractor to landscape the area around a manufacturing plant, including the installation of a sprinkler system. The expenditure was debited to the Land account. The landscaping is expected to have a 15-year useful life and no residual value. Lee uses the straight-line method of depreciation for all depreciable assets.
Required: Prepare the journal entries at December 31, 2021, to correct the errors (ignore income taxes).
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