A Client Has Asked You to Review and Correct the Following

Essay

A client has asked you to review and correct the following income statement.
Additional information:
a.A $5,500 machine tune-up was recorded as an asset.
b.The costs of buying a $90,000 piece of equipment on the last day of the fiscal year were treated as equipment expense.
c.An asset with a cost of $230,000,an estimated useful life of ten years,and a $20,000 salvage value was depreciated $23,000 for the full year.
d.The power and electricity costs of running a machine were treated as an asset for the year.The costs amounted to $16,000.
e.The $10,000 costs of installing the factory equipment in part b were treated as part of Rent expense.
Required:
1.List as many errors as you can find.
2.Prepare a correct income statement.