The estimated amount of depreciation on equipment for the current year is $5,000. (a) How is the

Question:

The estimated amount of depreciation on equipment for the current year is $5,000.
(a) How is the adjustment recorded? Indicate each account affected, whether the account is increased or decreased, and the amount of the increase or decrease.
(b) If the adjustment in (a) was omitted, which items would be erroneously stated on
(1) The income statement for the year and
(2) The as of December 31?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...