Courtney Corp. has significant stock that can be issued by the company. The managers are planning to sell the stock for a large profit by fraudulently inflating reported earnings. They plan to sell the stock after current earnings are reported, then leave for the carnival in Brazil. To accomplish their devious plans, they purchased inventory for $800,000 and charged the inventory purchase to equipment that is being depreciated using the straight-line method with a life of 8 years and no salvage value. If beginning and ending inventories were correctly stated and a full year's depreciation is recognized on the equipment, what is the amount of Courtney's current net income overstatement?

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The Answer of Courtney Corp. has significant stock that can be issued by the company. The managers are planning to sell the stock for a large profit by fraudulently inflating reported earnings. They plan to sell the stock after current earnings are reported, then leave for the carnival in Brazil. To accomplish their devious plans, they purchased inventory for $800,000 and charged the inventory purchase to equipment that is being depreciated using the straight-line method with a life of 8 years and no salvage value. If beginning and ending inventories were correctly stated and a full year's depreciation is recognized on the equipment, what is the amount of Courtney's current net income overstatement?