hello, I need help please
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
hello, I need help please
![During the first month of its current
fiscal year, Green Co. incurred repair
costs of $24,000 on a machine that had
4 years of remaining depreciable life.
The repair cost was inappropriately
capitalized. Green Co. reported
operating income of $163,000 for the
current year.
Required:
a. Assuming that Green Co. took a full
year's straight-line depreciation
expense in the current year, calculate
the operating income that should have
been reported for the current year.
Operating Income
b. Assume that Green Co.'s total assets
at the end of the prior year and at the
end of the current year were $933,000
and $1,021,000, respectively. Calculate
ROI (based on operating income) for
the current year using the originally](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F44040561-bc3e-4c0f-83c7-6bff2be49517%2F8c66cdd5-4075-41ba-aff8-8bc82296e2f0%2Floenthu_processed.jpeg&w=3840&q=75)
Transcribed Image Text:During the first month of its current
fiscal year, Green Co. incurred repair
costs of $24,000 on a machine that had
4 years of remaining depreciable life.
The repair cost was inappropriately
capitalized. Green Co. reported
operating income of $163,000 for the
current year.
Required:
a. Assuming that Green Co. took a full
year's straight-line depreciation
expense in the current year, calculate
the operating income that should have
been reported for the current year.
Operating Income
b. Assume that Green Co.'s total assets
at the end of the prior year and at the
end of the current year were $933,000
and $1,021,000, respectively. Calculate
ROI (based on operating income) for
the current year using the originally
![b. Assume that Green Co.'s total assets
at the end of the prior year and at the
end of the current year were $933,000
and $1,021,000, respectively. Calculate
ROI (based on operating income) for
the current year using the originally
reported data and then using corrected
data. (Round your answers to 1
decimal place. (e.g., 32.1))
ROI
Original data
%
Corrected data
%
c. Indicate the effect on ROI of
subsequent years if the error is not
corrected.
ROI will be too low.
ROI will be too high.
O ROI will remains the same.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F44040561-bc3e-4c0f-83c7-6bff2be49517%2F8c66cdd5-4075-41ba-aff8-8bc82296e2f0%2Fqzz4tp_processed.jpeg&w=3840&q=75)
Transcribed Image Text:b. Assume that Green Co.'s total assets
at the end of the prior year and at the
end of the current year were $933,000
and $1,021,000, respectively. Calculate
ROI (based on operating income) for
the current year using the originally
reported data and then using corrected
data. (Round your answers to 1
decimal place. (e.g., 32.1))
ROI
Original data
%
Corrected data
%
c. Indicate the effect on ROI of
subsequent years if the error is not
corrected.
ROI will be too low.
ROI will be too high.
O ROI will remains the same.
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