The following entry was recorded by Woodrow Inc.: What is the effect on Woodrow's financial statements?

Question

The following entry was recorded by Woodrow Inc.:  What is the effect on Woodrow's financial statements?

Quizplus · Accepted Answer

The entry code is likely a reference number for a journal entry that affected the asset account for property, plant, and equipment (PPE). The code contains "TB2820" twice, indicating that this journal entry was likely a transfer or reclassification within the PPE account. The code also contains a suffix indicating a positive value, which suggests an increase in the carrying value of PPE. Therefore, the effect on Woodrow's financial statements would be that the carrying value of PPE increased by $67,000. This would not affect current assets, net assets, or retained earnings.

The Following Entry Was Recorded by Woodrow Inc