Use the Following Information for Questions 66 and 67

question 69

Multiple Choice

Use the following information for questions 66 and 67.
Ernst Company purchased equipment that cost $2,250,000 on January 1, 2014. The entire cost was recorded as an expense. The equipment had a nine-year life and a $90,000 residual value. Ernst uses the straight-line method to account for depreciation expense. The error was discovered on December 10, 2016. Ernst is subject to a 40% tax rate.
-Ernst's net income for the year ended December 31, 2014, was understated by

• A) $1,206,000.
• B) $1,350,000.
• C) $2,010,000.
• D) $2,250,000.

Understand the legal definitions and implications of terms such as "in pari delicto" and "exculpatory clauses."

Identify legal requirements and limitations regarding the capacity to enter into contracts, including education and age criteria.

Recognize the significance of Sabbath laws and their historical context.

Learn the practical applications and implications of contracts for necessaries entered into by minors.