On May 1, 2022, Vontsira purchased equipment for $16,526,000 cash. The production team estimated that the equipment would last for 12 years and have a $826,000 salvage value. Unfortunatelydue to an error, no depreciation was recorded in 2022. The error was corrected when it was discovered at the end of 2023. Which of the following accounts will not be affected by the correction, assuming they use straight-line depreciation? (RE&CF 3) Depreciation Expense Accumulated Depreciation All of these accounts will be affected . Retained Earnings
On May 1, 2022, Vontsira purchased equipment for $16,526,000 cash. The production team estimated that the equipment would last for 12 years and have a $826,000 salvage value. Unfortunatelydue to an error, no depreciation was recorded in 2022. The error was corrected when it was discovered at the end of 2023. Which of the following accounts will not be affected by the correction, assuming they use straight-line depreciation? (RE&CF 3) Depreciation Expense Accumulated Depreciation All of these accounts will be affected . Retained Earnings
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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On May 1, 2022, Vontsira purchased equipment for $16,526,000 cash. The production team estimated that the equipment would last for 12 years and have a $826,000 salvage value. Unfortunatelydue to an error, no depreciation was recorded in 2022. The error was corrected when it was discovered at the end of 2023. Which of the following accounts will not be affected by the correction, assuming they use straight-line depreciation? (RE&CF 3) Depreciation Expense Accumulated Depreciation All of these accounts will be affected . Retained Earnings
Which of the following is a counterbalancing error? (RE&CF 2) Recording research and development costs as expenses Recording a full year of straight line depreciation when PPE was purchased in August Recording permanent tax differences in deferred taxes Recording interest expense as a decrease to notes payable
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“Since you have posted multiple questions, we will provide the solution only to the first question as per our Q&A guidelines. Please repost the remaining questions separately.”
Depreciation is defined as the accounting method implemented to allocate the cost of a long-term asset over its useful life. This is done in order to match the cost of the asset with the revenue it generates over its useful life, rather than recognizing the full cost as an expense in the year of purchase.
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