Langley Corporation replaced an HVAC system for one of its warehouses in July,2015,at a cost of $350,000.The accountant recording the purchase charged it to repairs and maintenance expense.The error was discovered early in 2017 while reconciling depreciation expense for 2016.The system should last about 7 years with no salvage value.What entry should be made before the 2016 books are closed if the company uses straight-line depreciation?
A) Accumulated Depreciation 50,000 Retained Earnings-Prior Period Adj. 300,000
B) HVAC System 400,000
C) Accumulated Depreciation 75,000 Retained Earnings-Prior Period Adj. 325,000
D) Retained Earnings-Prior Period Adj. 400,000

Question

Langley Corporation replaced an HVAC system for one of its warehouses in July,2015,at a cost of $350,000.The accountant recording the purchase charged it to repairs and maintenance expense.The error was discovered early in 2017 while reconciling depreciation expense for 2016.The system should last about 7 years with no salvage value.What entry should be made before the 2016 books are closed if the company uses straight-line depreciation?
A) Accumulated Depreciation 50,000 Retained Earnings-Prior Period Adj. 300,000 
B) HVAC System 400,000 
C) Accumulated Depreciation 75,000 Retained Earnings-Prior Period Adj. 325,000 
D) Retained Earnings-Prior Period Adj. 400,000

Quizplus · Accepted Answer

The Answer of Langley Corporation replaced an HVAC system for one of its warehouses in July,2015,at a cost of $350,000.The accountant recording the purchase charged it to repairs and maintenance expense.The error was discovered early in 2017 while reconciling depreciation expense for 2016.The system should last about 7 years with no salvage value.What entry should be made before the 2016 books are closed if the company uses straight-line depreciation?
A) Accumulated Depreciation 50,000 Retained Earnings-Prior Period Adj. 300,000 
B) HVAC System 400,000 
C) Accumulated Depreciation 75,000 Retained Earnings-Prior Period Adj. 325,000 
D) Retained Earnings-Prior Period Adj. 400,000

Langley Corporation Replaced an HVAC System for One of Its