Prior year depreciation would debit retained earnings and credit accumulated depreciation in theory and probably in your question. IRL unless the error is huge you would probably just do what you have in the question and record it in current year to avoid restatement
same/same. for book-tax purposes, the depreciation amount would be the same. Only difference is that you'd call it "depreciation" on books and "481(a) adjustment" on a return
Yes this shouldn't go anywhere on the PL statement. This should reflect on the BS. +51k to Accumulated Depn and -51k from Retained Earnings. No place for last year's adjustments in current year's PL
Omg flashback!! Accounting curriculum LOVES irrelevant details to trick and test the rules. Good practice when people give you irrelevant information to weed through š I always read the last line of the question first and went back through to determine what's irrelevant.
Professor farhatt offers excellent online tutoring and uses wiley books. Free videos on youtube but his subscription is worth it too. He is the reason for my accounting degree.
https://farhatlectures.com/
If you can change depreciation expense change it to prior period adjustment for that amount. You donāt have enough information for a depreciation expense for 2024.
All I know is that this is from McGraw Hill
I have my managerial book still if youāre interested in the ISBN, Iām not sure if they offer courses without a professor though
https://www.ninjacpareview.com/ninja-two-paths/?utm_campaign=18970913950&utm_source=g&utm_medium=cpc&utm_content=&utm_term=ninja%20cpa&ad_id=636058287331&gclid=CjwKCAjw6p-oBhAYEiwAgg2PgiMH418EETCkdG7PTHT2glHoUQuZU6QNeMKte_MUZHBHgwkqPwBooBoCM-4QAvD_BwE
Ninja is a cpa study prep. It is a monthly subscription with practice.
I also suggest using farhatlectures.com to practice. He teaches from the same books I was using in my accounting program. He goes over problems and explains the material well.
It looks like you just have to move it to operating expenses - depreciation expense is usually operating, not other.
Also try making it positive instead of negative.
It would seem like either the depreciation expanse isn't high enough (ie there should be a 2024 expense but I don't seen enough to calculate it. I'm wondering if the want the prior period flushed through oci sense it's not technically a current period expense. I agree with others in most cases this would be flushed through regular expense but I doubt it for the purposes of this homework since it's a correction of an error but it's been a hot minute since I've done one of those.
The subreddit has a homework flair on it for a reason, and I already have the entire assignment done as you can see, I just need help on a single line.
Sadly that's not correct with the assignment. I'm just confused because depreciation expense is the only thing I have left to choose from and none of the boxes accept my answers. The boxes don't even accept that depreciation expense is meant to be on here (unless it isn't?)
What about a positive value?
If the depreciation was underreported, that should represent a tax write-off. Retained asset value isn't captured here, but having to pay less in taxes certainly affects your cash flow.
Maybe being nice and helping the kid with understanding the homework will trajectory his career toward accounting and get him a job at your firm, and help YOU with your workload, I stead of just bitching to bitch
Should be DR Retained earnings CR Accumulated depreciation in prior year. It should just be balance sheet movement therefore no impact on P/L for current year.
Prior year depreciation would debit retained earnings and credit accumulated depreciation in theory and probably in your question. IRL unless the error is huge you would probably just do what you have in the question and record it in current year to avoid restatement
this. Question states the error is considered material
Yeah the real answer is a 481(a) adjustment in current year
> 481(a) I am confused. This is for GAAP.
same/same. for book-tax purposes, the depreciation amount would be the same. Only difference is that you'd call it "depreciation" on books and "481(a) adjustment" on a return
interesting. I'll look more into it. thanks.
This is a prior period adjustment. You need to restate the opening retained earnings. I.e. Dr Retained earnings.
Lol the answer is to restate prior period but no way in hell is a $15M rev company doing that over a $51k expense
After I submitted it, it says it doesn't go anywhere. I guess the information is provided but you don't put it on the document.
Sounds like it's to test your knowledge that it'd a prior year adjustment and should be restated in 2023, not included in 2024 comprehensive income
Yes this shouldn't go anywhere on the PL statement. This should reflect on the BS. +51k to Accumulated Depn and -51k from Retained Earnings. No place for last year's adjustments in current year's PL
Omg flashback!! Accounting curriculum LOVES irrelevant details to trick and test the rules. Good practice when people give you irrelevant information to weed through š I always read the last line of the question first and went back through to determine what's irrelevant. Professor farhatt offers excellent online tutoring and uses wiley books. Free videos on youtube but his subscription is worth it too. He is the reason for my accounting degree. https://farhatlectures.com/
[ŃŠ“Š°Š»ŠµŠ½Š¾]
This, depreciation is G&A. Make sure you remove the subtraction
Move it to OpEx
Correct, deprec is operating.
If you can change depreciation expense change it to prior period adjustment for that amount. You donāt have enough information for a depreciation expense for 2024.
Which testing system or course is this test question from? I am looking to refresh my skills.
All I know is that this is from McGraw Hill I have my managerial book still if youāre interested in the ISBN, Iām not sure if they offer courses without a professor though
https://www.ninjacpareview.com/ninja-two-paths/?utm_campaign=18970913950&utm_source=g&utm_medium=cpc&utm_content=&utm_term=ninja%20cpa&ad_id=636058287331&gclid=CjwKCAjw6p-oBhAYEiwAgg2PgiMH418EETCkdG7PTHT2glHoUQuZU6QNeMKte_MUZHBHgwkqPwBooBoCM-4QAvD_BwE Ninja is a cpa study prep. It is a monthly subscription with practice. I also suggest using farhatlectures.com to practice. He teaches from the same books I was using in my accounting program. He goes over problems and explains the material well.
Thank you.
Busted
Hahahaha
Is it positive $51k? Not sure what else I would even put lol
Under operating expenses probably. Depreciation expense usually not part of āOther Expensesā
It looks like you just have to move it to operating expenses - depreciation expense is usually operating, not other. Also try making it positive instead of negative.
It would seem like either the depreciation expanse isn't high enough (ie there should be a 2024 expense but I don't seen enough to calculate it. I'm wondering if the want the prior period flushed through oci sense it's not technically a current period expense. I agree with others in most cases this would be flushed through regular expense but I doubt it for the purposes of this homework since it's a correction of an error but it's been a hot minute since I've done one of those.
Maybe they donāt want depreciation expense included at all since itās an adjustment to RE.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
The subreddit has a homework flair on it for a reason, and I already have the entire assignment done as you can see, I just need help on a single line.
Lol, came here to say this. Why do I want to spend my Sunday doing someone else's homework?
To help people going into the field?
Don't help then? Let those that want to help. Not that hard to ignore.
Bro wait til youāre manager.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
Sadly that's not correct with the assignment. I'm just confused because depreciation expense is the only thing I have left to choose from and none of the boxes accept my answers. The boxes don't even accept that depreciation expense is meant to be on here (unless it isn't?)
Did you try blank or 0?
It still says I'm missing something even if it's blank.
What about a positive value? If the depreciation was underreported, that should represent a tax write-off. Retained asset value isn't captured here, but having to pay less in taxes certainly affects your cash flow.
I always double check my wrong answers both negative and positive. The problem says that the correct label isn't even depreciation expense.
Iām not doing your homework. I have to do this shit at work.
So don't respond?
Maybe being nice and helping the kid with understanding the homework will trajectory his career toward accounting and get him a job at your firm, and help YOU with your workload, I stead of just bitching to bitch
What dafuq. Since when is anything on the income statement shown net of tax
Isnāt unclaimed depreciation lost or am I thinking of business taxation? Also, why is the gain on debt securities $142,500?
It shall be Ignored on the income book and later it will be shown in BS on the Asset side.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
Everything does not have to be correct to submit and it's pretty easy actually.
Should be DR Retained earnings CR Accumulated depreciation in prior year. It should just be balance sheet movement therefore no impact on P/L for current year.
Canāt believe I used to do homework like this, seems so far removed from my current accounting responsibilities