The Following Information Is Available for Piper Corporation: the Company

Essay

The following information is available for Piper Corporation: The company accountant, in preparing financial statements for the year ending December 31, 2014, has discovered the following information:
The company's previous bookkeeper, who has been fired, had recorded depreciation expense on a machine in 2012 and 2013 using the double-declining-balance method of depreciation. The bookkeeper neglected to use the straight-line method of depreciation which is the company's policy. The cumulative effects of the error on prior years was ₤15,000, ignoring income taxes. Depreciation was computed by the straight-line method in 2014.
Instructions
(a) Prepare the entry for the prior period adjustment.
(b) Prepare the retained earnings statement for 2014.