Question

In 2018, it was discovered that Jenson Technologies had debited an expense account for the $400,000 cost a computer purchased on January 1, 2016. The computer's useful life was estimated to be four years with no residual value. Straight-line depreciation is used by Jenson. Ignoring income taxes, what journal entry will Jenson use to correct the error?

Answer 1

Step-by-step explanation:

journal entry will Jenson use to correct the error

Date Account Titles And Explanation Debit Credit

Computer $400,000

Accumulated depreciation ($100,000 × 2 years) $200,000

Retained earnings ($400,000 - $200,000) $200,000

Annual depreciation = (Cost - Salvage Value) / 4

= ($400,000 - 0) / 4

= $100,000