In 2018, Internal auditors discovered that Fay, Inc., had debited an .docx

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In 2018, Internal auditors discovered that Fay, Inc., had debited an expense account for the $3,900,000 cost of a machine purchased on January 1, 2015. The machine's useful life was expected to be 20 years with no residual value. Straight-line depreciation is used by Fay. The Journal entry to correct the error will include a credit to accumulated depreciation of Multiple Choice 0 $585.000 O $195,000 O $3.900.000 o $390,000 Berkshire Inc. uses a periodic Inventory system. At the end of 2017, It missed counting some Inventory Items, resulting in an Inventory understatement by $580,000. Assume that Berkshire has a 35% Income tax rate and that this was the only error It made. If undetected, what is the effect of this error on Berkshire's December 31,2017 balance sheet? Multiple Choice Assets understated by $580,000 and
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Unformatted text preview: shareholders' equity understated by $580,000 10 0 0 0 Assets understated by $377.000 and shareholders' equity understated by $377.000. Assets understated by $580.000, liabilities understated by $203.000 and shareholders' equity understated by $377.000 None of these answer choices are correct. In 2018, due to a change in marketing forecasts, Barney Corporation reduced the projected life of its patent for producing round dice. The cumulative patent amortization prior to 2018 would have been $22 million higher had the new life been used. Barney's tax rate is 30%. Barney's retained earnings as of December 31, 2018, would be (Round million answer to 2 decimal places.): Multiple Choice 0 Overstated by $15.40 million. O Overstated by $6.60 million. O Overstated by $22 million. 0 Unaffected....
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