FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Wildhorse Co. purchased a machine on January 1, 2023, for $572,000. At that time, it was estimated that the machine would have a
10-year life and no salvage value. On December 31, 2026, the firm's accountant found that the entry for depreciation expense had
been omitted in 2024. In addition, management has informed the accountant that the company plans to switch to straight-line
depreciation, starting with the year 2026. At present, the company uses the sum-of-the-years-digits method for depreciating
equipment.
Prepare the general journal entries that should be made at December 31, 2026, to record these events. (Ignore tax effects.) (Credit
account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the
account titles and enter o for the amounts. List all debit entries before credit entries.)
Account Titles and Explanation
Retained Earnings
Date
Dec. 31.
2026
Dec. 31.
2026
Accumulated Depreciation Machinery
(To correct for the omission of depreciation expense in
2024)
Depreciation Expense
Accumulated Depreciation-Machinery
(To record depreciation expense for 2026)
Debit
Credit
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Transcribed Image Text:Wildhorse Co. purchased a machine on January 1, 2023, for $572,000. At that time, it was estimated that the machine would have a 10-year life and no salvage value. On December 31, 2026, the firm's accountant found that the entry for depreciation expense had been omitted in 2024. In addition, management has informed the accountant that the company plans to switch to straight-line depreciation, starting with the year 2026. At present, the company uses the sum-of-the-years-digits method for depreciating equipment. Prepare the general journal entries that should be made at December 31, 2026, to record these events. (Ignore tax effects.) (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter o for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Retained Earnings Date Dec. 31. 2026 Dec. 31. 2026 Accumulated Depreciation Machinery (To correct for the omission of depreciation expense in 2024) Depreciation Expense Accumulated Depreciation-Machinery (To record depreciation expense for 2026) Debit Credit
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