1 answer

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?


Answers

Solutions Given data is, discovered that - On march 1, 2019 Deseat RED costs of $150000 - Income from continuing operations f

.

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