Question 7 4 pts Erst 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. Erst is subject to a 20% tax rate. Before the correction was made and before the books were closed on December 31, 2022, retained earnings was understated by $1,888,000 $1.770.000 $1,792,000 $2,400,000 Next Previous