In 2021, internal auditors discovered that PKE Displays, Inc. had debited an expense account for the $372,000 cost of equipment purchased on January 1, 2018. The equipment's life was expected to be five years with no residual value. Straight-line depreciation is used by PKE. Required: 1. Determine the cumulative effect of the error on net income over the three-year period from 2018 through 2020, and on retained earnings by the end of 2020. 2. Prepare the correcting entry assuming the error was discovered in 2021 before the adjusting and closing entries. (ignore income taxes.) 3. Assume instead that the equipment was disposed of in 2022 and the original error was discovered in 2023 after the 2022 financial statements were issued. Prepare the correcting entry in 2023. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine the cumulative effect of the error on net income over the three-year period from 2018 through 2020, and on retained earnings by the end of 2020. Net income over the period 2018 through 2020 is Retained earnings by the end of 2020 is by by RE Required 2 > Chadwick Enterprises, Inc., operates several restaurants throughout the Midwest. Three of its restaurants located in the center of a large urban area have experienced declining profits due to declining population. The company's management has decided to test the assets of the restaurants for possible impairment. The relevant information for these assets is presented below. Book value Estimated undiscounted sum of future cash flows Fair value $7.3 million 4.4 million 3.9 million Required: 1. Determine the amount of the impairment loss. 2. Determine the amount of the impairment loss assuming that the estimated undiscounted sum of future cash flows is $7.6 million and fair value is $5.4 million. (Negative amounts should be indicated by a minus sign. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5)). 1. Impairment loss 2. Impairment loss $ $ 3.9 million 5 million