Ng Holdings Ltd. had its first audit in 20X4. Its preliminary income figure, before tax, was $786,000. The following items were discovered:
a. Ng issued a bond payable at the beginning of 20X1 and received par value for its $1,000,000 convertible bond. The bond is convertible at the option of the investor. A value of $84,000 should have been assigned to the conversion option and classified in shareholders’ equity. Any discount on the bond should be amortized over its 15-year life, straight-line.

b. The company uses the aging method of estimating the required allowance for doubtful accounts. However, the method had been incorrectly applied in 20X4, with the result that the allowance was understated by $26,000 at the end of 20X4.
c. In April 20X4, a building site was swapped for another, similar property. No cash changed hands. The land had a book value of $233,000; the transaction was recorded at the appraised value of the property received, which was $325,000.
d. The company had accumulated tax loss carryforwards amounting to $400,000 at the end of 20X4, after the 20X4 tax returns were filed. None of the future tax benefit of these carryforwards had previously been recognized. In January 20X5, before the 20X4 financial statements were finalized, company managers realized that the loss carryforward would most likely be used in 20X5.

Required:
1. Classify each of the changes described above, and identify the correct accounting treatment.
2. Calculate revised 20X4 earnings. The tax rate is 25%.
3. If a retrospective adjustment to retained earnings is needed, calculate the retrospective adjustment. The tax rate is 25%.