Question: In 2 0 2 4 , internal auditors discovered that PKE Displays, Incorporated, had debited an expense account for the $ 3 5 0 ,

In 2024, internal auditors discovered that PKE Displays, Incorporated, had debited an expense account for the $350,000 cost of equipment purchased on January 1,2021. The equipments life was expected to be five years with no residual value. Straight-line depreciation is used by PKE.
Assume instead that the equipment was disposed of in 2025 and the original error was discovered in 2026 after the 2025 financial statements were issued. Prepare the correcting entry in 2026. Explain why with steps!

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