Use the following information for questions.
On January 2, 2015, Beaver Corp.purchased machinery for $135,000.The entire cost was incorrectly recorded as an expense.The machinery has a nine-year life and a $9,000 residual value.Beaver uses straight-line depreciation for all its plant assets.The error was not discovered until May 1, 2017, and the appropriate corrections were made.Ignore income tax considerations.
-Beaver's income statement for the year ended December 31, 2017 should show the cumulative effect of this error of
A)$0.
B)$93,000.
C)$107,000.
D)$121,000.

Question

Quizplus · Accepted Answer

The cumulative effect of the error is $0 because the correction of the error is treated as a prior period adjustment and does not affect the current year's income statement.

Use the Following Information for Questions