Transcontinental is a major telecommunication conglomerate. Assume that early in 2021, Transcontinental purchased equipment at a cost of 6 million euros (€6 million). Management expects the equipment to remain in service for four years and the estimated residual value to be negligible. Transcontinental uses the straight-line depreciation method. Because of an accounting error, Transcontinental expensed the entire cost of the equipment at the time of purchase. Because Transcontinental operates as a partnership, it pays no income taxes. 

Requirements 

Prepare a schedule to show the overstatement or understatement in the following items at the end of each year over the four-year life of the equipment: 

1. Total current assets

2. Equipment, net

3. Net income