On January 1, 2010, Jennifer Company purchased for $40, 000 a truck that had an estimated life of five years and no residual value at the end of its useful life.Jennifer uses straight-line depreciation.The cost of the truck was charged to Repairs Expense when purchased in 2010.
Required:
a. Ignoring income taxes, prepare the journal entry to correct the error if it was discovered and corrected on January 1,2013 (Jennifer's year ends on December 31).
b. When preparing the 2013 financial statements, how much depreciation expense should be reported on the comparative 2011 and 2012 income statements?

Question

On January 1, 2010, Jennifer Company purchased for $40, 000 a truck that had an estimated life of five years and no residual value at the end of its useful life.Jennifer uses straight-line depreciation.The cost of the truck was charged to Repairs Expense when purchased in 2010.
Required:
 a. Ignoring income taxes, prepare the journal entry to correct the error if it was discovered and corrected on January 1,2013 (Jennifer's year ends on December 31).
b. When preparing the 2013 financial statements, how much depreciation expense should be reported on the comparative 2011 and 2012 income statements?

Quizplus · Accepted Answer

The Answer of On January 1, 2010, Jennifer Company purchased for $40, 000 a truck that had an estimated life of five years and no residual value at the end of its useful life.Jennifer uses straight-line depreciation.The cost of the truck was charged to Repairs Expense when purchased in 2010.
Required:
 a. Ignoring income taxes, prepare the journal entry to correct the error if it was discovered and corrected on January 1,2013 (Jennifer's year ends on December 31).
b. When preparing the 2013 financial statements, how much depreciation expense should be reported on the comparative 2011 and 2012 income statements?

On January 1, 2010, Jennifer Company Purchased for $40, 000