4 . On January 1 , 2007 , Gregg Corp . acquired a machine at a cost of $500 000 . It is is to be depreciated on the straight - line met had over a five year period with no residual value . Because of a bookkeeping error , no depreciation was recognized In Gregg's 2007 financial statements . The oversight was discovered during the preparation of Gregg's 2008 financial statements Depreciation expense on this machine for 2008 should be 2 50 b . $100,000 $125 , 000 $200 090