Question
On December 31, 2014, before the books were closed, the management and accountants of Madrasa Inc. made the following determinations about three pieces of equipment.
On December 31, 2014, before the books were closed, the management and accountants of Madrasa Inc. made the following determinations about three pieces of equipment.
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Prepare all necessary entries in 2014 to record these determinations.(Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) |
Account Titles | Debit | Credit |
1. | ||
2. | ||
3. (To correct Equipment Expensed) | ||
4. (To record depreciation) | ||
Prepare comparative retained earnings statements for Madrasa Inc. for 2013 and 2014. The company had retained earnings of $200,000 at December 31, 2012.
MADRASA INC. Comparative Retained Earnings Statements For the Years Ended | ||
2014 | 2013 | |
Error in Recording EquipmentNet Income/(Loss)Retained Earnings, December 31Retained Earnings, January 1, as adjustedRetained Earnings, January 1, as reported | $ | $ |
AddLess: Error in Recording EquipmentNet Income/(Loss)Retained Earnings, December 31Retained Earnings, January 1, as adjustedRetained Earnings, January 1, as reported | ||
Error in Recording EquipmentNet Income/(Loss)Retained Earnings, December 31Retained Earnings, January 1, as adjustedRetained Earnings, January 1, as reported | ||
AddLess: Error in Recording EquipmentNet Income/(Loss)Retained Earnings, December 31Retained Earnings, January 1, as adjustedRetained Earnings, January 1, as reported | ||
Error in Recording EquipmentNet Income/(Loss)Retained Earnings, December 31Retained Earnings, January 1, as adjustedRetained Earnings, January 1, as reported | $ | $ |
Accounts:
Accounts Payable Accounts Receivable Accumulated Depreciation-Building Accumulated Depreciation-Equipment Accumulated Depreciation-Machinery Advertising Expense Amortization Expense Allowance for Doubtful Accounts Bad Debt Expense Cash Compensation Expense Consignment Out Construction in Process Copyrights Cost of Goods Sold Deferred Gross Profit Deferred Tax Liability Depreciation Expense Dividend Revenue Due to Customer Discount on Bonds Payable Equipment Equity Investments (Available-for-Sale) Equity Investments (Equity Method) Fair Value Adjustment Finance Expense Gain on Disposal of Plant Assets Income Tax Receivable Insurance Expense Interest Expense Interest Payable Interest Receivable Interest Revenue Inventory Inventory on Consignment Investment Revenue Lawsuit Liability Lawsuit Loss Loss Due to Market Decline of Inventory Machinery Maintenance and Repairs Expense No Entry Prepaid Insurance Property, Plant, and Equipment Purchases Rent Revenue Retained Earnings Revenue from Investment Salaries and Wages Expense Salaries and Wages Payable Sales Sales Commission Expense Sales Commission Payable Sales Revenue Sales Tax Expense Sales Tax Payable Share Capital Supplies Supplies Expenses Trademarks Unearned Rent Revenue Unrealized Holding Gain or Loss - Equity Unrealized Holding Gain or Loss - Income Warranty Expense Warranty Liabilit |
Print by: KRISTIN CASTY AC410C X40 16M8W1 - D Hartman / ACC 410C - Week 5 - Chap 22 Homework - Hartman *Problem 22-6 On December 31, 2014, before the books were closed, the management and accountants of Madrasa Inc. made the following determinations about three pieces of equipment. 1. Equipment A was purchased January 2, 2011. It originally cost $520,000 and, for depreciation purposes, the straight-line method was originally chosen. The asset was originally expected to be useful for 10 years and have a zero salvage value. In 2014, the decision was made to change the depreciation method from straightline to sum-of-the-years' digits, and the estimates relating to useful life and salvage value remained unchanged. 2. Equipment B was purchased January 3, 2010. It originally cost $249,000 and, for depreciation purposes, the straight-line method was chosen. The asset was originally expected to be useful for 15 years and have a zero salvage value. In 2014, the decision was made to shorten the total life of this asset to 9 years and to estimate the salvage value at $3,200. 3. Equipment C was purchased January 5, 2010. The asset's original cost was $181,300, and this amount was entirely expensed in 2010. This particular asset has a 10-year useful life and no salvage value. The straightline method was chosen for depreciation purposes. Additional data: 1. 2. 3. 4. 5. Income in 2014 before depreciation expense amounted to $391,000. Depreciation expense on assets other than A, B, and C totaled $55,100 in 2014. Income in 2013 was reported at $410,000. Ignore all income tax effects. 126,900 shares of common stock were outstanding in 2013 and 2014. Prepare all necessary entries in 2014 to record these determinations. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) No. Account Titles and Explanation Debit Credit 1. 2. 3. (To correct equipment expensed.) (To record depreciation.) Prepare comparative retained earnings statements for Madrasa Inc. for 2013 and 2014. The company had retained earnings of $200,000 at December 31, 2012. MADRASA INC. Comparative Retained Earnings Statements For the Years Ended 2014 2013 $ $ $ $ : : Copyright 2000-2016 by John Wiley & Sons, Inc. or related companies. All rights reserved. Question Attempts: 0 of 5 used
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