Short Answer
In July of 2020, the accountant discovered an error affecting the 2019 computation of amortization expense related to the company's patent. As a result of this error, 2019 amortization expense was understated by $21,000 and 2019 net income after taxes (which are paid at a rate of 30%) was overstated by $14,700.
A)What journal entry is needed to record this prior period adjustment?
B)How is this prior period adjustment reported in the financial statements?
Correct Answer:
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A) To record the prior period adjustment...View Answer
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