On January 1, 2012 Marsh Company Purchased and Installed a Telephone

question 242

Essay

On January 1, 2012 Marsh Company purchased and installed a telephone system at a cost of ₤20,000. The equipment was expected to last five years with a residual value of ₤3,000. On January 1, 2013 more telephone equipment was purchased to tie-in with the current system for ₤12,000. The new equipment is expected to have a useful life of four years. Through an error, the new equipment was debited to Telephone Expense. Marsh Company uses the straight-line method of depreciation.
Instructions
Prepare a schedule showing the effects of the error on Telephone Expense, Depreciation Expense, and Net Income for each year and in total beginning in 2013 through the useful life of the new equipment.

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Definitions:

Buffer System

A chemical system that maintains the pH of a solution by adjusting the proportion of acid and base.

Hemoglobin Buffer

A system in red blood cells that helps maintain pH balance in the blood by binding to or releasing hydrogen ions.

Bicarbonate Ions

An ion that acts as a buffer to maintain the pH level in blood and other bodily fluids.

Body Fluid pH

The measure of acidity or alkalinity of the body's fluids, crucial for maintaining homeostasis.