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:

Postconventional

A stage of moral development where individuals make ethical choices based on universal ethical principles and internalized values.

Moral Development

The process through which individuals develop proper attitudes and behaviors toward other people in society, based on social and cultural norms, laws, and personal beliefs.

Preconventional

The first level in Kohlberg's theory of moral development, where moral reasoning is based on individual needs and concrete rewards and punishments.

Conventional Role

Societal norms that dictate the expected behaviors, duties, and responsibilities of individuals based on their social or demographic characteristics, such as gender or age.