Ask Question
BusinessBusiness
18 August, 04:09

Joy Cunningham Co. purchased a machine on January 1, 2018, for $550,000. At that time, it was estimated that the machine would have a 10-year life and no salvage value. On December 31, 2021, the firm's accountant found that the entry for depreciation expense had been omitted in 2019. In addition, management has informed the accountant that the company plans to switch to straight-line depreciation, starting with the year 2021. At present, the company uses the sum-of-the-years'-digits method for depreciating equipment.'

Required:

(a) Prepare the general journal entries that should be made at December 31, 2021, to record these events. (Ignore tax effects.)

+2
Answers (1)
  1. 18 August, 05:39
    0
    Answer and Explanation:

    The Journal entry is shown below:-

    1. Retained Earnings Dr. $90,000

    To Accumulated Depreciation - Machinery $90,000

    (Being To correct for the omission of depreciation expense in 2019 is recorded)

    2. Depreciation Dr, $40,000

    To Accumulated Depreciation - Machinery $40,000

    (Being depreciation expense for 2021)

    Working Note:-

    Amount of Depreciation In 2019 = $550000 * 9 : 55

    = $90000

    Cost Of machine $550,000

    Less: Depreciation Prior to 2021

    2012 - $55000 * 10 : 55 $100,000

    2013 - $55000 * 9 : 55 $90,000

    2014 - $55000 * 8 : 55 $80,000 $270,000

    Book Value as on 01.01.2021 $280,000

    Depreciation For the 2021 = $280,000 : 7

    = $40,000
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Joy Cunningham Co. purchased a machine on January 1, 2018, for $550,000. At that time, it was estimated that the machine would have a ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
What is the par or stated value per share of apple's common stock? what percentage of apple's authorized common stock was issued at september 27, 2014? how many shares of common stock were outstanding at september 28, 2013, and at september 27, 2014?
Answers (1)
What is Anderson hoping to do as a next step and why
Answers (1)
Andre, the floor manager of a packing plant, is under pressure from his boss to increase productivity. He circulates a memo telling all of his workers that they need to increase the number of units packed each hour.
Answers (1)
During the year, Tamara had capital transactions resulting in gains (losses) as follows: • Sold stock in ABC Company (acquired two years ago) ($1,500) • Sold collectible coins (held for more than one year) $2,000 • Sold stock in XYZ Company
Answers (1)
Radon Corporation manufactured 33,000 grooming kits for horses during March. The company uses machine hour to allocate fixed manufacturing overhead.
Answers (1)
New Questions in Business
Internal control is a process designed to ensure reliable financial reporting. effective and efficient operations. compliance with applicable laws and regulations. Internal control is designed to ensure all of the items described in the answers.
Answers (1)
The opportunity cost of doing or getting something is best and fully defined as: A. The difference between the marginal cost and benefit of doing something B. The materials used in doing or getting something C.
Answers (1)
Which type of markup takes into account the total costs of running the company not just the wholesale cost of the product so that the markup amount is all profit?
Answers (1)
Give an example of a person interacting outside of a market?
Answers (1)
What are the strengths and weaknesses of the Campbell Soup Company's marketing?
Answers (1)
Home » Business » Joy Cunningham Co. purchased a machine on January 1, 2018, for $550,000. At that time, it was estimated that the machine would have a 10-year life and no salvage value.
Sign Up Forgot Password?