Question
On January 2, 2020 Fowler Corp. incorrectly expensed a $100,000 purchase of machinery with a 4-year useful life instead of properly capitalizing and depreciating the
On January 2, 2020 Fowler Corp. incorrectly expensed a $100,000 purchase of machinery with a 4-year useful life instead of properly capitalizing and depreciating the purchase. Fowler uses the sum-of-years-digits depreciation method for its plant assets.
If the error is discovered on December 31, 2021, before the 2021 books are closed, the required correcting entry would include which of the following?
Group of answer choices
Credit to retained earnings of $60,000
Credit to maintenance expense of $100,000
Credit to retained earnings of $30,000
Credit to accumulated depreciation of $40,000
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