1.

Due to an error in computing depreciation expense, Crote Corporation understated accumulated depreciation by $56 million as of December 31, 2016. Crote has a tax rate of 35%. Crote's retained earnings as of December 31, 2016, would be(Round million answer to 2 decimal places.):

the answer is:Overstated by $36.40 million. please explain why

2.

Which of the following changes should be accounted for using the retrospective approach?

a)A change to LIFO method of costing inventories.

b) A change from completed-contract method of accounting for long-term construction contracts.

c) A change from straight-line to declining balance depreciation.

d) A change in the estimated useful life of a depreciable asset.

the answer is b. why?

3.

Which of the following wouldnotbe accounted for using the prospective approach?

a) A change from the cash basis to accrual accounting.

b) A change in estimate.

c) A change to LIFO from FIFO for inventory costing.

d) A change in price indexes used under the LIFO method of inventory costing.

the answer is a, why?

4.

After issuing its financial statements, a company discovered that its beginning inventory was overstated by $100,000. Its tax rate is 35%. As a result of this error, net income was:

a)Overstated by $35,000.b)Understated by $65,000.c) Understated by $35,000.d) Overstated by $65,000.

the answer is b, why?

5.

Powell Company had the following errors over the last two years:

2014:	Ending inventory was overstated by $57,000 while depreciation expense was overstated by $24,900
2015:	Ending inventory was understated by $10,000 while depreciation expense was understated by $6,200.

By how much should retained earnings be adjusted on January 1, 2016? (Ignore taxes)

a) Increase by $28,700.

b) Decrease by $28,700.

c) Increase by $47,000.

d) Decrease by $32,300.

the answer is a, why?