7. A company purchased a new machine for $32,000 on October 1, 2018, paying cash. The machine has an estimated useful life of 4 years and a $4,000 salvage value. By mistake, the company erroneously expensed the entire cost of the machine at the time of purchase. If the company uses the straight-line method of depreciation for its fixed assets, this error would result in the following misstatements for 2018 and 2019 2018 2019 A. Net Income Stockholder Net Income Stockholder Assets Liabilities Equity Assets Liabilities Equity U 30,250 No Effect U 30,250 U 30,250 U 23.250 No Effect 07,000 07,000 2018 2019 B. Net Income Net Stockholder Stockholder Assets Liabilities Equity Liabilities Assets Income Equity U 32,000 No Effect U 32,000 U 32,000 No Effect No Effect No Effect No Effect C. 2018 2019 Stockholder Equity U 30,250 Stockholder Net Income Net Income Liabilities Assets Liabilities Equity Assets U 23,250 U 30,250 No Effect U 30,250 No Effect 07,000 U 23,250 2018 2019 D. Stockholder Equity Net Net Stockholder Assets Equity Liabilities Income Liabilities Income Assets No Effect No Effect No Effect No Effect No Effect No Effect No Effect No Effect 2019 2018 E. Net Stockholder Stockholder Net Equity Liabilities Income Equity Assets Liabilities Income Assets U 25,000 07,000 U 25,000 No Effect U 30,250 U 30,250 U 30,250 No Effect