Answered

Westonci.ca is the ultimate Q&A platform, offering detailed and reliable answers from a knowledgeable community. Explore comprehensive solutions to your questions from knowledgeable professionals across various fields on our platform. Connect with a community of professionals ready to help you find accurate solutions to your questions quickly and efficiently.

In 2018, internal auditors discovered that Fay, Inc., had debited an expense account for the $4,600,000 cost of a machine purchased on January 1, 2015. The machine's useful life was expected to be 20 years with no residual value. Straight-line depreciation is used by Fay. The journal entry to correct the error will include a credit to accumulated depreciation of:_____.

Sagot :

Zviko

Answer:

$230,000

Explanation:

Depreciation Charge (Straight line) = (Cost - Residual Value) ÷ Estimated Useful Life

therefore,

2018 Depreciation Charge = ($4,600,000 - $ 0) ÷ 20

                                               = $230,000

The journal entry to correct the error will include a credit to accumulated depreciation of $230,000

Thanks for using our service. We aim to provide the most accurate answers for all your queries. Visit us again for more insights. We appreciate your time. Please revisit us for more reliable answers to any questions you may have. Thank you for using Westonci.ca. Come back for more in-depth answers to all your queries.