Langley Corporation Replaced an HVAC System in One of Its

Multiple Choice

Langley Corporation replaced an HVAC system in one of its warehouses in July, 2017, at a cost of $410,000. The accountant recording the purchase charged it to repairs and maintenance expense. The error was discovered late in 2018 while reconciling depreciation expense for 2018. The system should last about 7 years with no salvage value. What entry should be made before the 2018 books are closed if the company uses straight-line depreciation? (Round intermediate calculations to the nearest cent and your final answer to the nearest dollar.)

A) $$\begin{array} { | l | r | r | } \hline \text { Warehouse } & 410,000 & \\\hline \text { Accumulated Depreciation - Warehouse } & & 58,571 \\\hline \text { Retained Earnings-Prior Period Adjustment } & & 351,429 \\\hline\end{array}$$
B) $$\begin{array} { | l | r | r | } \hline \text { Retained Earnings-Prior Period Adjustment } & 410,000 & \\\hline \text { Depreciation Expense-Warehouse } & 58,571 & \\\hline \text { Warehouse } & & 468,57 \\\hline\end{array}$$
C) $$\begin{array} { | l | r | r | } \hline \text { Warehouse } & 410,000 & \\\hline \text { Depreciation Expense (2018) -Warehouse } & 58,571 & \\\hline \text { Accumulated Depreciation-Warehouse } & & 87,857 \\\hline \text { Retained Earnings-Prior Period Adjustment } & & 380,714 \\\hline\end{array}$$
D) $$\begin{array} { | l | r | r | } \hline \text { Warehouse } & 410,000 & \\\hline \text { Depreciation Expense-Warehouse } & 58,571 & \\\hline \text { Retained Earnings } & & 468,571 \\\hline\end{array}$$