Chem-Lite, Inc. keeps its accounts on a fiscal year ending March 31st. At 31 March 20X1 the Equipment account in the general ledger looks as shown below. The company uses straight-line depreciation, 10-year life and 10 percent scrap value for all of its equipment. It is the company's policy to charge a full year's depreciation for all additions to equipment during the fiscal year, and for the purpose of this problem you may consider this policy satisfactory. The company recorded depreciation for the fiscal year ended 31 March 20X1. Equipment 4/1/X0 Honey. forward 140,000 12/1/X0 10,900 1/2/X1 1,052 2/1/X1 1,052 3/1/X1 1,052 When you search further, you find the following contract, dated December 1, 20X0, covering the purchase of equipment: List price $38,000 5% sales tax 1.900 Total $ 39.900 Down Payment 10.900 Balance 29.

Required: Prepare adjustment entries that you will propose as the auditor of Chem-Lite, Inc. on March 31, 20X1 for equipment and related depreciation accounts. (Assume that all amounts given are significant.) (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your interim calculations to the nearest whole dollar value.)

1. Record the entry to correct entries made to the Equipment account for payments in the installment agreement beginning on 1 December 20X0.

process	general journal	debt	Credit
1

2. Record the entry to correct the depreciation charged for equipment purchased under the installment agreement beginning 1 December 20X0.

process	general journal	debt	Credit
2

Answer rating: 100% (QA)

1 Correct Entries Made to the Equipment Account for Payments in the Installment Agreement Calculatio... View the full answer