In July of 2020, the Accountant Discovered an Error Affecting

question 44

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?

• A)What journal entry is needed to record this prior period adjustment?
• B)How is this prior period adjustment reported in the financial statements?

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Definitions:

Lost Future Sales

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UCC Exception

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Lemon Laws

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