In December of 2021, XL Computer's internal auditors discovered that office equipment costing $800,000 was charged to expense in 2019. The asset had an expected life of 10 years with no residual value. XL would have recorded a half year of depreciation in 2019. Required:
Prepare the necessary correcting entry that would be made in 2016 (ignore income taxes), and the entry to record depreciation for 2021.

Answer and Explanation:

The Journal entries are shown below:-

1. Office equipment Dr, $800,000

            To Accumulated depreciation-equipment $120,000

            To Retained earnings $680,000

(Being office equipment is recorded)

Here we debited the office equipment as assets is increasing and we credited the accumulated depreciation-equipment as assets is decreasing and retained earning as stockholder is increasing.

2. Depreciation expenses Dr, $80,000

           To Accumulated depreciation-equipment $80,000

(Being depreciation expenses is recorded)

Here we debited the depreciation expenses as it increasing the expenses and we credited the accumulated depreciation-equipment as decreases the assets.

Working note

Depreciation

For 2019

= $800,000 ÷ 10 years

= $80,000 × 6 ÷ 12

= $40,000

For 2020

= $800,000 ÷ 10 years

= $80,000

Total = $40,000 + $80,000

= $120,000

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

your welcome leave a rate and a < 3

i'ts proportional. if the inflation rate is 12% for example, the cpi will be 12% less.

hope it ,

bioteacher101