# On March 1, 2019, Desert discovered that R&D costs of $150,000 for 2017 were capitalized as... ###### Question: On March 1, 2019, Desert discovered that R&D costs of$150,000 for 2017 were capitalized as a part of the Historical Cost of the Patent, instead of being expensed. Income from Continuing Operations for 2019 includes the current year's R&D costs of $125,000 as an expense. 1. What type of scenario is addressed? [ Select ] ["Change in Accounting Principle", "Change in Accounting Estimate", "Correction of an Error", ""] 2. What adjustment (if any) is needed to Desert's ICO for 2019? [ Select ] ["Decrease ICO$150,000 to correctly expense the R&D", "Decrease ICO $105,000 to correctly expense the R&D", "Decrease ICO$25,000 to account for the additional R&D expense incurred", "No Change Needed"]

3. Does Desert need to restate its 2017 financial statements?

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