Recorded as Revenue Expenditure and ser up as Capital Expenditure
A company purchased a new computer for $4000 and a stack of writable CDs for $28. By accident the computer was recorded as a revenue expenditure and the stack was set up as a capital expenditure. Three months later depreciation for the year was calculated using the declining balance method (use 20% for all fixed assets). The net income for the year was $45000. Calculate what the correct net income would be.
That is a question from my exam review for my accounting exam tomorrow. My friends and I honestly, have no idea how to answer it. Any help would be much appreciated. I recently stumbled across this website on Google, looks pretty sweet. Thanks a lot.
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