Use the Following Information for Questions

question 53

Multiple Choice

Use the following information for questions.
In January 2012, Marcus Ltd.has installation costs of £9,000 on new machinery that were charged to Repair Expense.Other costs of this machinery of £30,000 were correctly recorded and have been depreciated using the straight-line method with an estimated life of 10 years and no residual value.At December 31,2012, Marcus decides that the machinery ha a remaining useful life of 15 years, starting with January 1,2012
-In 2012, Krasny Corporation discovered that equipment purchased on January 1,2010, for €52,500 was expensed at that time.The equipment should have been depreciated over 5 years, with no residual value.The effective tax rate is 30%.Krasny's 2012 journal entry to correct the error would include

• A)a credit to Equipment for €52,500
• B)a debit to Retained Earnings for €52,500.
• C)a credit to Retained Earnings for €22,050.
• D)a credit to Deferred Tax Liability for €15,750.

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Definitions:

Vendors List

A list in accounting or business software that contains details about suppliers and vendors from whom a company purchases goods or services.

Suppliers

Businesses or individuals that provide goods or services to companies, typically as part of the supply chain.

Addresses

A collection of information detailing the location of an individual or organization, typically including elements such as street name, number, city, and postal code.

Enter Bills

The process of recording invoices received from suppliers into the accounting system.