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Cedar Company purchased equipment that cost $100,000 on January 1, 2019. The entire cost was recorded as an expense. The equipment had a ten-year life.

Cedar Company purchased equipment that cost $100,000 on January 1, 2019. The entire cost was recorded as an expense. The equipment had a ten-year life. Cedar uses the straight-line method to account for depreciation expense. The error was discovered on December 10, 2022. Cedar is subject to a 20% tax rate.

What is the adjustment to retained earnings at January 1, 2022?

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