On January 1,2010,Pyle Company purchased an asset that cost $50,000 (no estimated residual value,estimated useful life 8 years,straight-line depreciation is used).An error was made because the total cost amount was debited to an expense account for 2010 and no depreciation on it was recorded.Pretax income for 2010 was $42,000.How much is the correct 2010 pretax income?
A)$35,750
B)$48,250
C)$85,750
D)$92,000

Question

Quizplus · Accepted Answer

2010 pretax income ($85,750) = $42,000 + $50,000 - $6,250**Straight-line depreciation expense ($6,250) = $50,000 F1F1F1S1F1F1F10 8

On January 1,2010,Pyle Company Purchased an Asset That Cost $50,000