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A3305 Chapter 22 Problem 2 & 3

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Question;Chapter 22, #2Rasmussen Inc. purchased a capital asset in January 2011 for $500,000. At the time the machine was expected to last for 20 years and have a residual value of $20,000. In 2014 Rasmussen determined that the machine would last for only 8 more years (from January 1, 2014) and have a residual value of $10,000 (however, the machine was not impaired). No entry has been made in 2014 to record depreciation expense for the year. Show the journal entry needed to record depreciation for 2014, and to reflect any other adjustment needed. Chapter 22, #3Mansang Co. mistakenly missed $10,000 of inventory (shipped FOB shipping point, meaning that Mansang owned it when it left the vendor?s warehouse) that was in transit to one of its warehouses on December 31, 2013.An internal auditor caught the error on April 27, 2014. If Mansang has an effective tax rate of 35%, what journal entry is required to correct Mansang?s 2014 books?

 

Paper#39923 | Written in 18-Jul-2015

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