Langley Corporation Replaced an HVAC System in One of Its

question 67

Multiple Choice

Langley Corporation replaced an HVAC system in one of its warehouses in July, 2017, at a cost of $410,000. The accountant recording the purchase charged it to repairs and maintenance expense. The error was discovered late in 2018 while reconciling depreciation expense for 2018. The system should last about 7 years with no salvage value. What entry should be made before the 2018 books are closed if the company uses straight-line depreciation? (Round intermediate calculations to the nearest cent and your final answer to the nearest dollar.)

• A) \[\begin{array} { | l | r | r | }
• \hline \text { Warehouse } & 410,000 & \\
• \hline \text { Accumulated Depreciation - Warehouse } & & 58,571 \\
• \hline \text { Retained Earnings-Prior Period Adjustment } & & 351,429 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | r | r | }
• \hline \text { Retained Earnings-Prior Period Adjustment } & 410,000 & \\
• \hline \text { Depreciation Expense-Warehouse } & 58,571 & \\
• \hline \text { Warehouse } & & 468,57 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | r | r | }
• \hline \text { Warehouse } & 410,000 & \\
• \hline \text { Depreciation Expense (2018)-Warehouse } & 58,571 & \\
• \hline \text { Accumulated Depreciation-Warehouse } & & 87,857 \\
• \hline \text { Retained Earnings-Prior Period Adjustment } & & 380,714 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | r | r | }
• \hline \text { Warehouse } & 410,000 & \\
• \hline \text { Depreciation Expense-Warehouse } & 58,571 & \\
• \hline \text { Retained Earnings } & & 468,571 \\
• \hline
• \end{array}\]

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Definitions:

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Established norms, policies, and guidelines that govern business operations within a corporation.

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