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In 2013, the Hermes Corporation Failed to Record $8,000 in Depreciation

question 143

Essay

In 2013, the Hermes Corporation failed to record $8,000 in depreciation expense. The error was discovered in May of 2014.
Required:
Make the appropriate journal entry in the books of Hermes Corporation in the year 2014. Explain the impact of the error correction on the Hermes' 2014 net income.


Definitions:

Unavoidable

Refers to events or outcomes that cannot be prevented or avoided.

Effective Utilization

The degree to which a resource, such as equipment or labor, is used effectively to produce goods or services.

Bottleneck

A machine or some other part of a process that limits the total output of the entire system.

Defective Units

Products that fail to meet quality standards or specifications and are therefore unfit for sale or use.

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