In 2025, Ivanhoe Company discovered an error while preparing its financial statements. A building constructed at the beginning of 2024 costing $1350000 has not been depreciated. The estimated useful life of the building is 30 years with no salvage value. Straight- line depreciation is used. Ivanhoe also used straight-line depreciation for tax purposes and properly included depreciation on its tax return. Income tax payable was also reported correctly at a tax rate of 20%. Income before tax and depreciation expenses in 2025 was $450000 What would be the 2025 net income if depreciation had been recorded properly? Ⓒ$324000 O $414000 O$405000 O $450000
In 2025, Ivanhoe Company discovered an error while preparing its financial statements. A building constructed at the beginning of 2024 costing $1350000 has not been depreciated. The estimated useful life of the building is 30 years with no salvage value. Straight- line depreciation is used. Ivanhoe also used straight-line depreciation for tax purposes and properly included depreciation on its tax return. Income tax payable was also reported correctly at a tax rate of 20%. Income before tax and depreciation expenses in 2025 was $450000 What would be the 2025 net income if depreciation had been recorded properly? Ⓒ$324000 O $414000 O$405000 O $450000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![In 2025, Ivanhoe Company discovered an error while preparing its financial statements. A building constructed at the beginning of
2024 costing $1350000 has not been depreciated. The estimated useful life of the building is 30 years with no salvage value. Straight-
line depreciation is used. Ivanhoe also used straight-line depreciation for tax purposes and properly included depreciation on its tax
return. Income tax payable was also reported correctly at a tax rate of 20%. Income before tax and depreciation expenses in 2025 was
$450000
What would be the 2025 net income if depreciation had been recorded properly?
$324000
O $414000
Ⓒ$405000
$450000
eTextbook and Media](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6bf09cb8-8619-46ea-bbdb-614a00996c5c%2F25bdeec4-4e64-447c-8dd3-edd21ed277f3%2Flvz5awq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:In 2025, Ivanhoe Company discovered an error while preparing its financial statements. A building constructed at the beginning of
2024 costing $1350000 has not been depreciated. The estimated useful life of the building is 30 years with no salvage value. Straight-
line depreciation is used. Ivanhoe also used straight-line depreciation for tax purposes and properly included depreciation on its tax
return. Income tax payable was also reported correctly at a tax rate of 20%. Income before tax and depreciation expenses in 2025 was
$450000
What would be the 2025 net income if depreciation had been recorded properly?
$324000
O $414000
Ⓒ$405000
$450000
eTextbook and Media
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