Joy Cunningham Co. purchased a machine on January 1, 2018, for $550,000. At that time, it was estimated that the machine would have a 10-year life and no salvage value. On December 31, 2021, the firm's accountant found that the entry for depreciation expense had been omitted in 2019. In addition, management has informed the accountant that the company plans to switch to straight-line depreciation, starting with the year 2021. At present, the company uses the sum-of-the-years'-digits method for depreciating equipment.'
Required:
(a) Prepare the general journal entries that should be made at December 31, 2021, to record these events. (Ignore tax effects.)

Answer and Explanation:

The Journal entry is shown below:-

1. Retained Earnings Dr. $90,000

        To Accumulated Depreciation - Machinery $90,000

(Being To correct for the omission of depreciation expense in 2019 is recorded)

2. Depreciation Dr, $40,000  

           To Accumulated Depreciation - Machinery $40,000

(Being depreciation expense for 2021)  

Working Note:-  

Amount of Depreciation In 2019 = $550000 × 9 ÷ 55

= $90000  

Cost Of machine                                        $550,000

Less: Depreciation Prior to 2021  

2012 - $55000 × 10 ÷ 55      $100,000  

2013 - $55000 × 9 ÷ 55        $90,000  

2014 - $55000 × 8 ÷ 55         $80,000     $270,000

Book Value as on 01.01.2021                     $280,000

Depreciation For the 2021 = $280,000 ÷ 7

= $40,000

hi,

henry is an economist and wants to understand the relationship between inflation and consumer spending habits. for his research, he needs the consumer price index for 2014 and the inflation rate. based on the prices of goods given, what will he find to be the cpi and inflation rate for 2014? assume that a consumer’s basket for three consecutive years consists of the following:

you dont privide answer choices.

answer - 15% of a inflatation rate is 15% less in cpi

d) social security number

let me know if i am correct or not, so i can edit the answer.