A purchase of machine tools by Jet Co. for $2,450 should have been capitalized as the...

 

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A purchase of machine tools by Jet Co. for $2,450 should have been capitalized as the tools have a 3 year life and an expected residual value of $350. However, Jet Co. erroneously charged the purchase to Repairs & Maintenance Expense. At year-end closing, Jet's bookkeeper noticed the error and made only one correcting entry resulting in Net Income and Total Assets to be understated: Dr Depreciation Expense $2,450/3 Cr Accumulated Depreciation $2,450/3 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? $ A purchase of machine tools by Jet Co. for $2,450 should have been capitalized as the tools have a 3 year life and an expected residual value of $350. However, Jet Co. erroneously charged the purchase to Repairs & Maintenance Expense. At year-end closing, Jet's bookkeeper noticed the error and made only one correcting entry resulting in Net Income and Total Assets to be understated: Dr Depreciation Expense $2,450/3 Cr Accumulated Depreciation $2,450/3 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 rating: 100% (QA)

Required 1 The amount of depreciation expense Jet Co must show on the yearend income statement can b... View the full answer