Equipment costing $40000 was purchased on 1 January 2019. It has a useful working life of 5
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Question:
Equipment costing $40000 was purchased on 1 January 2019. It has a useful working life of
5 years and a residual value of $2000. Depreciation using the straight-line method was included
in the income statement for the year ended 31 December 2019.
It was then found that the reducing balance method at 30% per annum should have been used.
What was the effect on the profit for the year ended 31 December 2019 of this error?
Related Book For
Interpreting and Analyzing Financial Statements
ISBN: 978-0132746243
6th edition
Authors: Karen P. Schoenebeck, Mark P. Holtzman
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