ABC Company overstated 20Y1 revenue by $10,000. The error also affected 20Y2 by overstating revenue by $5,000. The company discovered the error in 20Y3, which included an overstatement to revenue of $3,000.
The company reports only 20Y3 on the current income statement and has a 30% tax rate. Determine the PPA the company should record to correct the error. () represents a decrease to beginning retained earnings.