Solution+to+Ch+22-6+Problem+-+wk+6[1]

Solution+to+Ch+22-6+Problem+-+wk+6[1] - 84,000 Depreciation...

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PROBLEM 22-6 (a) 1. Depreciation Expense. ....................................... 86,625 Accumulated Depreciation—Asset A. ...... 86,625 Computations: Cost of Asset A $495,000 Less: Depreciation prior to 2008 148,500 * Book value, January 1, 2008 $346,500 *($495,000 ÷ 10) X 3 Depreciation for 2008: $346,500 X 7/28** = $86,625 **[7(7 + 1)] ÷ 2 = 28 2. Depreciation Expense. ....................................... 17,000 Accumulated Depreciation—Asset B. ...... 17,000 Computations: Original cost $120,000 Accumulated depreciation (1/1/08) $8,000 X 4 32,000 Book value (1/1/08) 88,000 Estimated salvage value 3,000 Remaining depreciable base 85,000 Remaining useful life (9 years—4 years taken) ÷ 5 Depreciation expense—2008 $ 17,000 3. Asset C. ................................................................ 140,000
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Accumulated Depreciation—Asset C. ...... 56,000 (4 X $14,000) Retained Earnings. .....................................
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Unformatted text preview: 84,000 Depreciation Expense. ....................................... 14,000 Accumulated DepreciationAsset C. ...... 14,000 PROBLEM 22-6 (Continued) (b) KELTNER INC. Comparative Retained Earnings Statements For the Years Ended 2008 2007 Retained earnings, January 1, as previously reported $200,000 Add: Error in recording Asset C 98,000 * Retained earnings, January 1, as adjusted $654,000 298,000 Add: Net income 227,375 ** 356,000 Retained earnings, December 31 $881,375 $654,000 *Amount expensed incorrectly in 2004 $140,000 Depreciation to be taken to January 1, 2007 ($14,000 X 3) 42,000 Prior period adjustment for income $ 98,000 **Income before depreciation expense (2008) $400,000 Depreciation for 2008 Asset A $86,625 Asset B 17,000 Asset C 14,000 Other 55,000 (172,625 ) Income after depreciation expense $227,375...
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Solution+to+Ch+22-6+Problem+-+wk+6[1] - 84,000 Depreciation...

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