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21 August, 01:43

In 2016, due to a change in marketing forecasts, Barney Corporation reduced the projected life of its patent for producing round dice. The cumulative patent amortization prior to 2016 would have been $10 million higher had the new life been used. Barney's tax rate is 30%. Barney's retained earnings as of December 31, 2016, would be:

a. Overstated by $3 million.

b. Overstated by $10 million.

c. Unaffected.

d. Overstated by $7 million.

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Answers (1)
  1. 21 August, 01:58
    0
    (C) Unaffected.

    Explanation:

    This is a change in estimate. No prior period adjustment is needed.
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