Question

one of the three is wrong

Coming from Question 2... Scenario : On March 1. 2019. Desert discovered that R&D costs of $150.DOD for 2017 were capitained as a part of the of the Patent, instead of being expensed Income from Continuing Operations for 2019 includes the current y of $125.000 as an expense. wal l RADO 1. What type of scenario is addressed? Correction of an Error 2. What adjustment (if any) is needed to Desert's 10 for 2019? No Change Needed 3. Does Desert need to restate its 2017 financial statements? Yes Answer 1: Correction of an Error Answer 2: No Change Needed Answer 3:

Answer 1

Ans: All of three are correct I.e. Correction of an error; No change needed for an adjustment and mostly the third one i.e. Desert needs to be restate its 2017 financial Statements As R&D is an expense that is incurred in a particular financial year and must appear in the income statement rather than being capitalized So R&D expense of $150,000 must be debited in income statement.