Change in Accounting Principle, Leases. Romer Corporation began operations on January 1, 2013. The company decided to lease all plant assets rather than purchase them. Romer used the operating method for all leased assets in 2013 and 2014. On January 1, 2015, a new accountant joined the company and said the assets should be accounted for as capital leases following U. S. GAP. Assume this is a correction of an error. Income before tax and lease-related expenses in 2013, 2014, and 2015 is $ 580,000, $ 600,000, and $ 720,000, respectively. The tax rate is 40%. Lease-related expenses under the two methods are presented below:

Required
a. Determine the amount of the prior period adjustment in the year of the correction.
b. Prepare partial comparative income statements for the years ended December 31, 2013 through 2015.

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Operating Year Capital Lease Lease 165,500 118,00 140,000 $118,000 $118,000 2014 2015 129,000