On January 1, 2022, Janik Corp. acquired a machine at a cost of $700,000. It is to be depreciated on the straight-line method over a five-year period with no residual value. Because of a bookkeeping error, no depreciation was recognized in Janik's 2022 financial statements. The oversight was discovered during the preparation of Janik's 2023 financial statements. Depreciation Expense on this machine for 2023 should be:

a.

$0

b.

$140,000

c.

$175,000

d.

$280,000

e.

$168,000

Lorango Corp. maintains its accounting records on the cash basis but restates its financial statements to the accrual method of accounting. Lorango had $110,000 in cash-basis pretax income for 2025. The following information pertains to Lorangos balance sheets for December 31, 2024 and 2025:

	2024	2025
Accounts Payable	51,000	40,000
Prepaid Expenses	13,000	6,000

Under the accrual method, what amount of income before taxes should Lorango report in its December 31, 2025 income statement?

a.

$114,000

b.

$ 97,000

c.

$138,000

d.

$106,000

e.

$ 92,000