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

question 50

Essay

On January 1, 2012, Keller Company purchased and installed a telephone system at a cost of $20,000. The equipment was expected to last five years with a salvage value of $3,000. On January 1, 2013, more telephone equipment was purchased to tie-in with the current system for $10,000. The new equipment is expected to have a useful life of four years. Through an error, the new equipment was debited to Utilities Expense. Keller Company uses the straight-line method of depreciation.
Instructions
Prepare a schedule showing the effects of the error on Utilities 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:

Competitive Advantage

A unique attribute or competency a company possesses that enables it to outperform its competitors, providing it with a market advantage.

Brand Loyalty

The tendency of consumers to continuously purchase one brand's products over competing ones due to their trust and satisfaction with the brand.

Rewards Program

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Marketing Strategy

a company's plan designed to promote products or services to reach a specific target market, involving decisions on product, price, place, and promotion.