Use the Following Information for Questions

question 43

Multiple Choice

Use the following information for questions.
Link Co.purchased machinery that cost $810,000 on January 4, 2009.The entire cost was recorded as an expense.The machinery has a nine-year life and a $54,000 residual value.The error was discovered on December 20, 2011.Ignore income tax considerations.
-Link's income statement for the year ended December 31, 2011, should show the cumulative effect of this error in the amount of

• A)$726,000.
• B)$642,000.
• C)$558,000.
• D)$0.

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Definitions:

Creative Problem Solving

A method of addressing issues or challenges by using imagination, innovation, and outside-the-box thinking to develop effective solutions.

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Group Beliefs

The shared convictions or perspectives held collectively by a group of people or society.

Ways of Thinking

Diverse mental strategies or attitudes adopted by individuals or groups in processing information, making decisions, and solving problems.