Mismatching at worldcom hard during the four fiscal


Question: Mismatching at WorldCom (Hard) During the four fiscal quarters of 2001 and the first quarter of 2002, WorldCom incorrectly capitalized access charges to local networks as assets (as explained in Box 2.4). The amount of costs capitalized were as follows:

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Suppose WorldCom amortized these capitalized costs straight-line over five years (20 quarters). Calculate the amount of the over statement of income before tax for each of the five quarters.

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