On January 1, Year, 1, Henna Inc. purchased a building $800,000. The entire cost was recorded as a debit to Land. The building had an estimated 30-year life and a $110,000 residual value. Henna uses the straight-line method to account for depreciation expense. The error was discovered on September 10, Year 8. Henna is subject to a 25% tax rate. Before the correction was made and before the books were closed on December 31, Year 8, retained earnings was overstated by: Do not include $ or comma in your answer.
On January 1, Year, 1, Henna Inc. purchased a building $800,000. The entire cost was recorded as a debit to Land. The building had an estimated 30-year life and a $110,000 residual value. Henna uses the straight-line method to account for depreciation expense. The error was discovered on September 10, Year 8. Henna is subject to a 25% tax rate. Before the correction was made and before the books were closed on December 31, Year 8, retained earnings was overstated by: Do not include $ or comma in your answer.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:On January 1, Year, 1, Henna Inc. purchased a building $800,000. The entire cost was recorded as a debit to Land.
The building had an estimated 30-year life and a $110,000 residual value.
Henna uses the straight-line method to account for depreciation expense.
The error was discovered on September 10, Year 8.
Henna is subject to a 25% tax rate.
Before the correction was made and before the books were closed on December 31, Year 8, retained earnings was overstated by:
Do not include $ or comma in your answer.
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