Question

Recording Error Corrections Related to Equipment On April 1, 2021, the following 2020 errors were discovered after the 2020 financial statements were issued. a. Equipment purchased on January 1, 2020, with a cost of $28,000, salvage value of $1,680, and useful life of 8 years was incorrectly expensed as maintenance cost. The company uses the straight-line method to depreciate all equipment b. In 2020, fully depreciated equipment with an original cost of $35,000 and no salvage value was sold for $2,800. The company's entry for the sale was a debit to Cash for $2,800 and a credit to Equipment for $2,800. C. Equipment purchased on June 30, 2020, with a cost of $91,000, salvage value of $6,300 and a useful life of 8 years was incorrectly entered into the depreciation system as having a useful life of 18 years. Required Prepare entries to correct each of the errors a, b, and discovered in 2021. Ignore income taxes. Note: Round your final answer to the nearest whole dollar. For example, enter 502 for 502.4 and enter 503 for 502.5. Note: Record your credit accounts in alphabetical order using the first letter of the account name. Dr. Cr. a. Date Account Name Jan 1, 2021 Equipment Accumulated Depreciation Retained Earnings--Prior Period Adjustment 28,000 3,290 24.710 Date Dr. Cr. 0 b. Account Name Jan. 1, 2021 Accumulated Depreciation Equipment Retained Earnings--Prior Period Adjustment 2,800 x 0 2,800 x ox 0 Dr. Cr. Date Account Name Jan. 1, 2021 Retained Earnings--Prior Period Adjustment Accumulated Depreciation 5,882 x 0 5,882 x Check

Answer 1

b.	Date	Account Name	Debit	Credit
	Jan 1. 2021	Accumulated Depreciation	35,000
		Equipment		32,200
		Retained Earnings - Prior Period Adjustment		2,800
c.	Date	Account Name	Debit	Credit
	Jan 1. 2021	Retained Earnings - Prior Period Adjustment	5,881
		Accumulated Depreciation		5,881
		[(91,000 - 6,300)/8 - (91,000 - 6,300)/18]
		(10,587 - 4,706)