WIT JANUARY' {, CULLY, LEAVET LOT. QUICHESEd MACHINERY, TOY & L`, LUN. THE ENTIRE LOST WHEELS MEDITECHHY recorded as an EXPENSE . The machinery has a nine - year life and a IS ONLY residual value . Beaver USES straight line depreciation for all its tangible assets . The Error was not discovered until May 1, ZUIZ, and the appropriate Corrections WERE made . Ignore* INCOME tax Considerations . The Income statement for the Year Ended DECEMBER 31, 201Z should show the cumulative Effect of this Error of $121, 000 . $107, 000 93,000