Use the Following Information for Questions 64 and 65

question 47

Multiple Choice

Use the following information for questions 64 and 65.
Link Co. purchased machinery that cost $1,800,000 on January 4, 2013. The entire cost was recorded as an expense. The machinery has a nine-year life and a $120,000 residual value. The error was discovered on December 20, 2015. Ignore income tax considerations.
-Link's income statement for the year ended December 31, 2015, should show the cumulative effect of this error in the amount of

• A) $1,613,333.
• B) $1,426,667.
• C) $1,240,000.
• D) $0.

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Definitions:

Marginal Product

The extra yield generated from the utilization of an additional unit of a specific input, with all other inputs remaining unchanged.

Specific Input

A specific input in production is one that is exclusively used in the production of a particular good or service, often leading to unique advantages or efficiencies.

Hourly Wage

The rate of pay for each hour worked, commonly used to compensate employees in many jobs.

Cost of Gasoline

The price consumers pay for gasoline, influenced by factors like oil production levels, taxes, and demand for fuel.