Question
During the first month of its current fiscal year, Green Co. incurred repair costs of $24,000 on a machine that had 4 years of remaining
During the first month of its current fiscal year, Green Co. incurred repair costs of $24,000 on a machine that had 4 years of remaining depreciable life. The repair cost was inappropriately capitalized. Green Co. reported operating income of $160,000 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.
-Op. 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 $937,000 and $1,019,000, 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 percantage
-Original Data = ?
-Corrected data = ?
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