Maneesh 02 May 2020 at 11:04 AM

For 20X0, Mac Co. estimated its two-year equipment warranty costs based on $100 per unit sold in 20X0. Experience in 20X1 indicates that the estimate should have been $110 per unit. The effect of this $10 difference from the estimate is reported:



A) In its 20X1 income from continuing operations and in future income statements.
B) As a correction of an error requiring 20X0 financial statements to be restated.
C) As an accounting change, net of tax, below 2X10 income from continuing operations
D) As a change in accounting principle requiring a retrospective adjustment to the 20X0 financial
statements