value 5.00 points In 2016, internal auditors discovered that PKE Displays, Inc.,

Question

value 5.00 points In 2016, internal auditors discovered that PKE Displays, Inc., had debited an expense account for the 372,000 cost of a equipment purch years ased on January 1, 2013 The equipment's life was expected to be five with no residual value. Straight-line depreciation is used by PKE. (If no entry is required for a transactionlevent, select "No journal entry required" in the first account field.) Required: Prepare the appropriate correcting entry assuming the error was discovered in 2016 before the adjusting and closing entries. (Ignore income taxes) View transaction list View journal entry worksheet No Event General Journal Debit Credit Equipment Depreciation expense 372,000 74,400 Accumulated depreciation Retained earnings 297,600 148,800

Explanation / Answer

Answer 1 Correcting journal entry No. Event General Journal Debit Credit 1 1 Equipment $372,000.00 Accumulated depreciation $223,200.00 Retained Earnings $148,800.00 Depreciation per year = Cost of equipment / Useful life = $372000 / 5 years = $74,400 Answer 2 Correcting journal entry No. Event General Journal Debit Credit 1 1 Equipment $372,000.00 Accumulated depreciation $372,000.00

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