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28 Sep 2019
(Accounting Change and Error Analysis)
On December 31, 2010, before the books were closed, the managementand accountants of Madrasa Inc. made the following determinationsabout three depreciable assets.
Depreciable asset A was purchased January 2, 2007. It originallycost $540,000 and, for depreciation purposes, the straight-linemethod was originally chosen. The asset was originally expected tobe useful for 10 years and have a zero salvage value. In 2010, thedecision was made to change the depreciation method from straight-line to sum-of-the-years'-digits, and the estimates relating touseful life and salvage value remained unchanged.
Depreciable asset B was purchased January 3, 2006. It originallycost $180,000 and, for depreciation purposes, the straight-linemethod was chosen. The asset was originally expected to be usefulfor 15 years and have a zero salvage value. In 2010, the decisionwas made to shorten the total life of this asset to 9 years and toestimate the salvage value at $3,000.
Depreciable asset C was purchased January 5, 2006. The asset'soriginal cost was $160,000, and this amount was entirely expensedin 2006. This particular asset has a 10-year useful life and nosalvage value. The straight-line method was chosen for depreciationpurposes.
Additional data:
Income in 2010 before depreciation expense amounted to$400,000.
Depreciation expense on assets other than A, B, and C totaled$55,000 in 2010.
Income in 2009 was reported at $370,000.
Ignore all income tax effects.
100,000 shares of common stock were outstanding in 2009 and2010.
Instructions
prepare all necessary entries in 2010 to record thesedeterminations. (For multiple debit/credit entries, list amountsfrom largest to smallest eg 10, 5, 3, 2.)
Description Debit Credit
Complete the comparative retained earnings statements for MadrasaInc. for 2009 and 2010. The company had retained earnings of$200,000 at December 31, 2008. (If answer is zero, please enter 0.Do not leave any fields blank.)
MADRASA INC.
Comparative Retained Earnings Statements
For the Years Ended
2010 2009
MADRASA INC.
Comparative Retained Earnings Statements
For the years ended
2010 2009
(Accounting Change and Error Analysis)
On December 31, 2010, before the books were closed, the managementand accountants of Madrasa Inc. made the following determinationsabout three depreciable assets.
Depreciable asset A was purchased January 2, 2007. It originallycost $540,000 and, for depreciation purposes, the straight-linemethod was originally chosen. The asset was originally expected tobe useful for 10 years and have a zero salvage value. In 2010, thedecision was made to change the depreciation method from straight-line to sum-of-the-years'-digits, and the estimates relating touseful life and salvage value remained unchanged.
Depreciable asset B was purchased January 3, 2006. It originallycost $180,000 and, for depreciation purposes, the straight-linemethod was chosen. The asset was originally expected to be usefulfor 15 years and have a zero salvage value. In 2010, the decisionwas made to shorten the total life of this asset to 9 years and toestimate the salvage value at $3,000.
Depreciable asset C was purchased January 5, 2006. The asset'soriginal cost was $160,000, and this amount was entirely expensedin 2006. This particular asset has a 10-year useful life and nosalvage value. The straight-line method was chosen for depreciationpurposes.
Additional data:
Income in 2010 before depreciation expense amounted to$400,000.
Depreciation expense on assets other than A, B, and C totaled$55,000 in 2010.
Income in 2009 was reported at $370,000.
Ignore all income tax effects.
100,000 shares of common stock were outstanding in 2009 and2010.
Instructions
prepare all necessary entries in 2010 to record thesedeterminations. (For multiple debit/credit entries, list amountsfrom largest to smallest eg 10, 5, 3, 2.)
Description Debit Credit
Complete the comparative retained earnings statements for MadrasaInc. for 2009 and 2010. The company had retained earnings of$200,000 at December 31, 2008. (If answer is zero, please enter 0.Do not leave any fields blank.)
MADRASA INC.
Comparative Retained Earnings Statements
For the Years Ended
2010 2009
MADRASA INC.
Comparative Retained Earnings Statements
For the years ended
2010 2009
On December 31, 2010, before the books were closed, the managementand accountants of Madrasa Inc. made the following determinationsabout three depreciable assets.
Depreciable asset A was purchased January 2, 2007. It originallycost $540,000 and, for depreciation purposes, the straight-linemethod was originally chosen. The asset was originally expected tobe useful for 10 years and have a zero salvage value. In 2010, thedecision was made to change the depreciation method from straight-line to sum-of-the-years'-digits, and the estimates relating touseful life and salvage value remained unchanged.
Depreciable asset B was purchased January 3, 2006. It originallycost $180,000 and, for depreciation purposes, the straight-linemethod was chosen. The asset was originally expected to be usefulfor 15 years and have a zero salvage value. In 2010, the decisionwas made to shorten the total life of this asset to 9 years and toestimate the salvage value at $3,000.
Depreciable asset C was purchased January 5, 2006. The asset'soriginal cost was $160,000, and this amount was entirely expensedin 2006. This particular asset has a 10-year useful life and nosalvage value. The straight-line method was chosen for depreciationpurposes.
Additional data:
Income in 2010 before depreciation expense amounted to$400,000.
Depreciation expense on assets other than A, B, and C totaled$55,000 in 2010.
Income in 2009 was reported at $370,000.
Ignore all income tax effects.
100,000 shares of common stock were outstanding in 2009 and2010.
Instructions
prepare all necessary entries in 2010 to record thesedeterminations. (For multiple debit/credit entries, list amountsfrom largest to smallest eg 10, 5, 3, 2.)
Description Debit Credit
Complete the comparative retained earnings statements for MadrasaInc. for 2009 and 2010. The company had retained earnings of$200,000 at December 31, 2008. (If answer is zero, please enter 0.Do not leave any fields blank.)
MADRASA INC.
Comparative Retained Earnings Statements
For the Years Ended
2010 2009
MADRASA INC.
Comparative Retained Earnings Statements
For the years ended
2010 2009
Lelia LubowitzLv2
28 Sep 2019
