Arena,IncUses Straight-Line Depreciation for Its Equipment

question 23

Multiple Choice

Arena,Inc.uses straight-line depreciation for its equipment.Arena purchased equipment for $300,000 and estimated its useful life at eight 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.

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Definitions:

Status Effects

Conditions applied to characters or entities in a game that modify their abilities, behavior, or statistics, often temporarily.

Corporate Cover-Ups

involve deliberate attempts by a company to conceal wrongdoing, mistakes, or unethical behavior from the public, regulators, or other relevant stakeholders to protect its reputation and interests.

Noise

Noise is anything that interferes with communication effectiveness.