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Suppose an Accounting Intern Mistakenly Calculated Depreciation Expense on the Land

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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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The depreciable amount would be the $811...

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