Woods,IncPurchased a New Engine for a Long-Distance Truck in January,2015

Multiple Choice

Woods,Inc.purchased a new engine for a long-distance truck in January,2015.The engine cost $200,000 and should give the truck an additional 400,000 miles of life.Inadvertently,the engine was charged to truck repairs expense.The error was found in December,2016.The company records depreciation based on miles driven with no salvage value.Miles driven in 2015 were 80,000 and 70,000 in 2016.Which one of the following entries properly corrects all the errors thru December 31,2016? (Ignore income taxes.)

A) Accumulated Depreciation 35,000
Retained Earnings-Prior Period Adj. 165,000
B) Engine 200,000
C) Retained Earnings-Prior Period Adj. 240,000
D) Accumulated Depreciation 75,000
Retained Earnings-Prior Period Adj. 160,000