Question: For each situation, identify whether it is treated as a prior period adjustment or change in accounting estimate.The company's auditors discovered that two years ago

For each situation, identify whether it is treated as a prior period adjustment or change in accounting estimate.The company's auditors discovered that two years ago an expense was mistakenly recorded twice. This had a material effect on the income statement.After using equipment for the past six years, which had an estimated useful life of ten years and no salvage value, the company revaluates the equipment and now estimates the salvage value to be $

10, 000 .

Upon reviewing customer contracts, the company realizes it mistakenly reported $

110, 000

of revenue instead of the actual amount earned of $

11, 000 .

This mistake occurred two years ago and had a material effect on financial statements.

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