Solution-Explains the accounting error that has been made

Explains the accounting error that has been made

Reference no: EM133053660

Question - Your company purchased some expensive, sophisticated equipment in January of Year 5. The cost was $2,000,000 and the equipment was expected to have a useful life of 10 years. Now, in Year 6, the company has spent an additional $1,000,000 on the same equipment. $400,000 of this total was on ordinary repairs to fix things in order to maintain expected operating condition. However, the other $600,000 was spent on extraordinary repairs, which consisted of replacing the original engine so that the useful life of the entire equipment will be extended another five years. Company management was to "capitalize" the entire $1,000,000.

Write a memo around two paragraphs in length to your supervisor that explains the following:

-The accounting error that has been made.

-The effect this error will have on the company's financial statements this year.

-The problems that might result.

-The importance of fixing the error and what needs to be done to fix the error.

Reference no: EM133053660

Questions Cloud

Explain the type of diversification : Can value be added in the same way regardless of the type of diversification? Or are there better ways to add value depending on the type of diversification inv

Levels of logistics professionals : In handout form (in conversational style), can you share insights into where you see logistics and supply chain management going and how a company can leverage

Active process in the close phase : Question 1: Which of these is an example of a project? Question 2: There are approximately how many processes within the PMBOK® Guide in practice?

Compute depreciation expense under straight-line method : Estimated production is 36,000 units and estimated working hours are 20,000. Compute depreciation expense under Straight-line method

Explains the accounting error that has been made : Write a memo around two paragraphs in length to your supervisor that explains the following:- The accounting error that has been made

Prepare the statement of stockholders equity for Company A : October 21 Resells 2, 450 shares of treasury stock purchased on May 10 for $59 per share. Prepare the statement of stockholders equity for Company A

Critical element of database design : Entity-relationship modeling is a critical element of database design. determine at least a way in which it impacts the overall development of the database.

Effects of the internet and social media : Explain how you would develop the marketing mix when doing business in Vietnam. Provide specific examples for each of the four main components of the marketing

Opportunity to practice thinking skills : Research has shown that reflective practitioners are more skilled in areas of problem-solving and critical thinking. Throughout your program of study, you are a

User Account

All Pages

Explains the accounting error that has been made

Reference no: EM133053660

Reference no: EM133053660

Questions Cloud

Reviews

Write a Review

Accounting Basics Questions & Answers

A company purchased merchandise inventory at a cost of 4300

Provide the journal entry necessary to account for aqua ltd

Which of the following accounts of a governmental unit is

Accounting for uncollectible accounts-allowance method

What is the value of arms index for the day

What is the simple rate of return on the investment

What amount should be debited to bad debts expense

What is the amount of impairment loss

How would the information a management accountant would use

How to analyze the situation at oriole furniture

Determine the manufacturing assembly variable cost

Find the Accumulated Depreciation for the machine

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT