Question - On January 2, Rodriguez Company paid $56,100 to purchase equipment that has a useful life of 11 years. The equipment will be depreciated equally over the 11-year period as depreciation expense. The cost of $56,100 is divided by the useful life of 11 years to determine the amount of the yearly depreciation expense of $5,100. If the appropriate adjusting entry is not made at the end of the year, what will be the effect on:
(a) Income statement accounts (overstated, understated, or no effect)?
(b) Net income (overstated, understated, or no effect)?
(c) Balance sheet accounts (overstated, understated, or no effect)?