1.

During the first month of its current fiscal year, Green Co. incurred repair costs of $19,000 on a machine that had 4 years of remaining depreciable life. The repair cost was inappropriately capitalized. Green Co. reported operating income of $167,000 for the current year.

Required:
a.	Assuming that Green Co. took a full year's straight-line depreciation expense in the current year, calculate the operating income that should have been reported for the current year.

Operating income: $__________________

b.	Assume that Green Co.'s total assets at the end of the prior year and at the end of the current year were $934,000 and $1,023,000, respectively. Calculate ROI (based on operating income) for the current year using the originally reported data and then using corrected data.(Round your answers to 1 decimal place.)

	ROI
Original data	________%
Corrected data	_________%

c.	Indicate the effect on ROI of subsequent years if the error is not corrected.
	ROI will be too high _______ ROI will remains the same_________ ROI will be too low__________