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Snowcat [4.5K]
4 years ago
7

In 2018, internal auditors discovered that Fay, Inc., had debited an expense account for the $700,000 cost of a machine purchase

d on January 1, 2015. The machine's useful life was expected to be five 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 ___________?
Business
1 answer:
8_murik_8 [283]4 years ago
6 0

Answer:

Explanation:

The correct journal entry is shown below:

Equipment A/c Dr 700,000

      To Accumulated depreciation A/c $420,000

      To Retained earnings A/c $280,000

(Being the error is recorded and the remaining balance is credited to the retained earning account)

The depreciation expense would be

= (Original cost - residual value) ÷ (useful life)  

= ($700,000 - $0) ÷ (5 years)  

= ($700,000) ÷ (5 years)  

= $140,000  

For three years, the depreciation would be

= $140,000 × 3 years

= $420,000

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5 0
2 years ago
If the consumption of a product or service involves external benefits, then the government can improve efficiency in the market
likoan [24]

Answer:

b. providing a subsidy to correct for an underallocation of resources.

Explanation:

When the external benefit of an activity exceeds cost, the activity generates postive externality.

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I hope my answer helps you

8 0
4 years ago
On January 1, Bargain Company's Valuation Allowance for Trading Investments account had a debit balance of $18,500. On December
natulia [17]

Answer:

3) Unrealized Gain on Trading Investments of $1,500.

Explanation:

By January 1, Bargain Company had recognized a $18,500 gain on their investment (the valuation allowance account had a debit balance = gain). By the end of the year, the gain on the investment had increased to $20,000 (= $100,000 - $80,000), so you need to recognize an additional gain of $1,500 (= $20,000 - $18,500).

4 0
3 years ago
Brian visited a local restaurant twice and on both occasions he received a discount of 10 percent on his bill. Which factor led
BaLLatris [955]

Answer: B

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8 0
3 years ago
Read 2 more answers
Pinkin Inc. needs to determine a price for a new phone model. Pinkin desires a 25% markup on the total cost of the phone. Pinkin
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Answer:

See below

Explanation:

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4 0
3 years ago
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