The following errors were discovered during the current year.

1. A machine with a cost of \($33\) 500 and accumulated depreciation to the date of sale of \($24\) 000 was sold for \($9000\). The sale was recorded by a debit to Cash at Bank and a credit to Machinery for $9000.

2. Depreciation of machinery, \($3240\), was incorrectly credited to Accumulated Depreciation – Buildings.

3. Delivery equipment, purchased on 1 July for \($18\) 620, was debited to the Purchases account. The equipment has a useful life of 4 years and an estimated residual value of \($900\). The straight-line depreciation method is used for delivery equipment.

4. Land taxes of \($9320\) were paid and debited to Land Tax Expense. Of this, \($4200\) was back taxes from previous years on land purchased during the current year.

5. A machine with a cost of \($42\) 000 and accumulated depreciation to the date of exchange of \($16\) 000 was exchanged on 23 December for a new machine with a cash price of \($52\) 000. A trade-in allowance of \($20\) 000 was allowed on the old machine. The following entry was made:

6. The cost of installing security lighting, \($8\) 000, was charged to Maintenance Expense on 4 January. The lights have a useful life of 8 years and no residual value. Assume straight-line depreciation.
Required

(a) Prepare general journal entries to correct the errors assuming the accounting records have not been closed for the current year ending 31 December.

Transcribed Image Text:

Machinery Accumulated Depreciation Machinery Cash at Bank - Machinery 58 000 16000 42 000 32 000