Arena, Inc

question 178

Multiple Choice

Arena, Inc.uses straight-line depreciation for its equipment.Arena purchased equipment for $300,000 and estimated its useful life at 8 years.The bookkeeper failed to consider the residual value of $50,000.What is the impact on earnings per share and operating income of failing to consider the residual value?

• A) Earnings per share will be overstated and operating income will be understated.
• B) Earnings per share will be understated and operating income will be overstated.
• C) Both earnings per share and operating income will be overstated.
• D) Both earnings per share and operating income will be understated.

---

Definitions:

Paraplegic

A condition characterized by the partial or total paralysis of the lower half of the body, often resulting from spinal cord injury or disease.

Motorized Wheelchair

A wheelchair equipped with an electric motor, designed to increase mobility for individuals with mobility impairments.

World Health Organization

An international public health agency of the United Nations, dedicated to improving health conditions and responding to health emergencies around the world.

Holistic Approach

A method of care that considers the patient's physical, mental, and emotional health when providing treatment.