? On January 1, 2018, Command Corp. bought equipment for $320,000. The bookkeeper erroneously recorded this equipment

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On January 1, 2018, Command Corp. bought equipment for $320,000. The bookkeeper erroneously recorded this equipment as a debit to repairs & maintenance expense. No depreciation had been recorded in 2018. You are the new accountant for this business and you are in the process of preparing the 2019 financial statements when you notice that the $320,000 expenditure for equipment was recorded incorrectly as an expense and that depreciation had not been recorded last year. Depreciation should be recorded for this equipment using the straight- line method with an assumed salvage value of S0 and an estimated useful life of ten years. The tax rate is 40%. The unadjusted balance in retained eamings at January 1, 2019 was $3,000,000. The company had a net income after tax of $240,000 and paid dividends of $150,000 during 2019. Required: a) Calculate the earnings correction that Command Corp. must show in the 2019 financial statements. b) Prepare the 2019 entry to record the correction of the 2018 error. General Journal Date Account Titles and Explanation Debit Credit On January 1, 2018, Command Corp. bought equipment for $320,000. The bookkeeper erroneously recorded this equipment as a debit to repairs & maintenance expense. No depreciation had been recorded in 2018. You are the new accountant for this business and you are in the process of preparing the 2019 financial statements when you notice that the $320,000 expenditure for equipment was recorded incorrectly as an expense and that depreciation had not been recorded last year. Depreciation should be recorded for this equipment using the straight- line method with an assumed salvage value of S0 and an estimated useful life of ten years. The tax rate is 40%. The unadjusted balance in retained eamings at January 1, 2019 was $3,000,000. The company had a net income after tax of $240,000 and paid dividends of $150,000 during 2019. Required: a) Calculate the earnings correction that Command Corp. must show in the 2019 financial statements. b) Prepare the 2019 entry to record the correction of the 2018 error. General Journal Date Account Titles and Explanation Debit Credit

Answer rating: 100% (QA)

a Calculate the earnings corrections that Command corp must show in 2019 financiat statement Particu... View the full answer