Suppose an Accounting Intern Mistakenly Calculated Depreciation Expense on the Land

question 186

Essay

Suppose an accounting intern mistakenly calculated depreciation expense on the Land account.She assigned it a 50-year life and a residual value of $10,000,000.Using the cost of the land (assume it was $811,000,000)and the straight-line method of depreciation,discuss the dollar effect of this error on pretax earnings and total assets.

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Definitions:

Selective Attention

The cognitive process of focusing on a specific aspect of information while simultaneously ignoring other perceivable information.

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A progressive neurodegenerative disorder characterized by memory loss, confusion, and a variety of cognitive disabilities.

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A chronic and progressive movement disorder, characterized by the degeneration of dopamine-producing neurons in the brain, leading to symptoms such as tremors, stiffness, and slow movement.