Questions $3$: CH$21$ Accounting Changes and Error Analysis $($Total $28$ points$)$ Part I$)$ unrelated to Part II$)\_13$ points $$ N Holdings Inc. $($The company$)$ had its first audit in $2023.$ Its preliminary$$ income figure, before $,$ was $$780,000,$ The following items were discovered: $$ a The company uses the aging method of estimating the required allowance for doubtful accounts. However, the method had been incorrectly applied in $2023,$ with the result that the allowance was understated by $$25,000$ at the end of $2023.$ b In $2022,$ N Holdings was sued in a patent infringement law suit. In $2023,$ the company lost the the court case and must pay $$75,000$ to settle the suit. No previous journal enstries were recorded related to this because the company believed they would win the case.$$ c $2022$ sales revenue included $$36,000$ that had been received in cash during $2022,$ but the related products were not delivered until early $2023.$ Title did not pass to the purchaer until $2023$ following the delivery.$$ Instructions: $$ Classify each of the changes described above $(1,2,3)$ with a brief explanation supporting your conclusion, and the related journal entries, if applicable. $$ N Holdings follows IFRS. If an adjustment is to be made, please take into account the income tax effect. Tax rate $20\%.$ Part II$)$ unrelated to Part I$)\_15$ points $$ S$$Corp$.$s accountant, Josh, was preparing the adjusting entries for the company$$s year ended December $31,2023,$ when the CFO called him to her office. $$Josh$,$ she said, $$I$$ve been considering a couple of matters that may require different treatment this year.$$ First, the license rights$$ we acquired in early $2021$ for $$530,000$will now likely be used until the end of $2025$ and then be sold for $$220,000.$ We previously thought that we$$d use it for$10$years in total and then be able to sell it for $$100,000.$ We$$ve been using the decling balance at $10\%$ amortizing the license rights.$$ We did not apply the half$-$year rule in the year of purchase" $$Second$,$ I discovered that the property we bought on July $2,2020,$ for $$272,000$was charged entirely to the Land account instead of being allocated between Land $($$$60,000)$ and Building $($$$212,000).$ The building should be of use to us for a total of$25$years$.$ At that point, it$$ll be sold and we should realize at least $$46,800$from the building sale. We applied half$-$year rule in the year of purchase.$$Please let me know how these changes should be accounted for and what effect they will have on the financial statements.$$ Instructions: $$ a$)$ Classify each of the accounting changes described above, and identify the correct accounting treatment.

$$ Show your analysis, calculation to arrive at the numbers needed for the journal entries in Requirement b$)$ b$)$ X Corp.$$follows IFRS. Answer the following, ignoring income tax considerations and assuming that the company has not previously reported quarterly results. $$ Assuming that no amortization has been recorded for the license fee for $2023.$ Prepare the entries that are needed to be posted in $2023,$ based on your assessment from requirement a$)$