Truck 2 cost $30,000 on January 1, 2006. In error, the $30,000 truck cost was...
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Accounting
Truck 2 cost $30,000 on January 1, 2006. In error, the $30,000 truck cost was expensed in 2006. The truck should be depreciated on a straight-line basis over a estimated useful life of 10 years with a $10,000 residual value. Books are still open for 2015 therefore the correct current year depreciation expense has already been recorded for 2015 fiscal year. Entry to correct the prior period error through retained earnings, including income tax effects - prior year books closed:
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