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On January 2,2021, Carla Vista Corp. purchased machinery for $272160. The entire cost was incorrectly...

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Accounting

On January 2,2021, Carla Vista Corp. purchased machinery for $272160. The entire cost was incorrectly recorded as an expense. The machinery has a nine-year life and a $20160 residual value. Carla Vista uses straight-line depreciation for all its plant assets. The error was not discovered until May 1,2023, and the appropriate corrections were made. Ignore income tax considerations.
Before the corrections were made, retained earnings was understated by
$216160,
$184800.
$272160.
$240800.
image

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