In 2017, 5age Coporation disoovered that equipment purchased r $53,000 was expen

Question

In 2017, 5age Coporation disoovered that equipment purchased r $53,000 was expensed at that tirme. The equipmert should have been decreciated over 5 years, with no salvage value. The eTective tax rate is 30%. Sage uses straight-line depreciatin Prepare sas2017 jaurnal entry ta carrect the cTor. (Crevt account titles are autonatically Indented when aount is entered. Do not indent manuanly. Irno entry is required, sclect "No Entry for the account tities and enter O for the amounts) Account Titles and Explanation on January 1, 2015,

Explanation / Answer

SOLUTION

Account titles and Explanation Debit ($) Credit ($) Equipment 53,000 Accumulated Depreciation ($53,000 /5 *2) 21,200 Deferred Tax Liability ($31,800 * 30%) 9,540 Retained Earnings ($31,800 - $9,540) 22,260 (To correct the error)

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