Pharoah Company purchased equipment that cost $3180000 on January 1, 2020. The entire cost was recorded as an expense. The equipment had a 9-year life and a $127200 residual value. Pharoah uses the straight-line method to account for depreciation expense. The error was discovered on December 10, 2022. Pharoah is subject to a 30% tax rate. Pharoah’s net income for the year ended December 31, 2020, was understated by $3180000. $2840800. $2226000. $1988560.
Pharoah Company purchased equipment that cost $3180000 on January 1, 2020. The entire cost was recorded as an expense. The equipment had a 9-year life and a $127200 residual value. Pharoah uses the straight-line method to account for depreciation expense. The error was discovered on December 10, 2022. Pharoah is subject to a 30% tax rate. Pharoah’s net income for the year ended December 31, 2020, was understated by $3180000. $2840800. $2226000. $1988560.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 14P: Hunter Company purchased a light truck on January 2, 2019 for 18,000. The truck, which will be used...
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Pharoah Company purchased equipment that cost $3180000 on January 1, 2020. The entire cost was recorded as an expense. The equipment had a 9-year life and a $127200 residual value. Pharoah uses the straight-line method to account for depreciation expense. The error was discovered on December 10, 2022. Pharoah is subject to a 30% tax rate.
Pharoah’s net income for the year ended December 31, 2020, was understated by
Pharoah’s net income for the year ended December 31, 2020, was understated by
$3180000.
$2840800.
$2226000.
$1988560.
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