On January 1, 20x3; a Company Purchased an Operational Asset

question 75

Essay

On January 1, 20x3; a company purchased an operational asset for $44,000.At the date of purchase, the full amount was debited to expense.At the end of 20x6, the audit discovered this error.The asset had no residual value and should be depreciated over 10 years, using the sum-of-years'-digits method.Give the entry at the end of 20x6 to correct the accounts.Assume the accounts for 20x6 have not been closed.

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Definitions:

Directors

Individuals elected by shareholders to oversee and guide the management and affairs of a corporation.

Articles of Incorporation

Official legal documents that establish a corporation's existence, outlining its name, purpose, structure, and other essential details.

Incorporation Statute

A legal document that establishes a corporation's existence under the laws of a specific state or jurisdiction.

Directors

Individuals elected by shareholders to manage the overall affairs of a corporation and set its strategic direction.