Journal entries for net income and retained earnings transactions. Prepare journal entries for each of the following transactions of Able Corporation for 2008. Ignore income taxes.
a. January 15: As a result of a computer software error the preceding December, the firm failed to record depreciation on office facilities totaling $35,000.
b. March 20: An earthquake in California causes an uninsured loss of $70,000 to a warehouse.
c. December 31: The firm acquired its office building six years before December 31, 2008. The building cost $400,000, had zero estimated salvage value, and had a 40 year life. The firm uses the straight line depreciation method. Able Corporation now estimates that the building will have a total useful life of 30 years instead of 40 years. Record depreciation expense on the building for 2008 and any required adjustment to depreciation of previous years.