Question 7 (3.4 points) Ernst Company purchased equipment that cost $3,000,000 on January 1, 2020. The entire cost was recorded as an expense. The equipment had a nine-year life and a $120,000 residual value, Ernst uses the straight-line method to account for depreciation expense. The error was discovered on December 10, 2022. Ignore income taxes, Ernst's net income for the year ended December 31, 2020, was understated by $2,144,000. $2,680,000 $3,000,000 $2,400,000