Colby Enterprses Is Subject to a 30% Tax Rate and Has

Multiple Choice

Colby Enterprses is subject to a 30% tax rate and has a December 31 year-end.During 2010,the accountant discovered an error made in 2009 relative to an expenditure that was incorrectly classified as an asset when it should have been expensed.The total pre-tax amount of the error was $70,000.The prior period adjustment to beginning retained earnings will be ______ by $_______.

A) reduced $49,000
B) reduced $21,000
C) increased $70,000
D) increased $49,000