A purchase of machine tools by Jet Co. for $4,130 should have been capitalized as...
80.2K
Verified Solution
Link Copied!
Question
Accounting
A purchase of machine tools by Jet Co. for $4,130 should have been capitalized as the tools have a 3 year life and an expected residual value of $590. However, Jet Co. erroneously charged the purchase to Repairs & Maintenance Expense. At year-end closing, Jets bookkeeper noticed the error and made only one correcting entry resulting in Net Income and Total Assets to be understated:
Dr Depreciation Expense $4,130 / 3
Cr Accumulated Depreciation $4,130 / 3
Required 1: Assuming you fixed all errors, what is the amount of depreciation expense Jet Co. must show on the year end income statement? $
Required 2: Assuming you fixed all errors, what is the amount for accumulated depreciation Jet Co. must show on the year end balance sheet? (type it as a positive number) $
Required 3: Assuming you fixed all errors, what net amount (i.e., cost net of accumulated depreciation) should Jet Co. show for tools on the year end balance sheet? $
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
