3. Pat Corporation acquired an 80 percent interest in Sal Corporation on January 1, 2011, and issued consolidated financial statements at and for the year ended December 31, 2011. Pat and Sal had issued separate-company financial statements in 2010 (2 Points) The change in reporting entity is reported by restating the financial statements of all prior periods presented as consolidated statements The cumulative effect of the change in reporting entity is shown in a separate category of the income statement net of tax The income effect of the error is charged or credited directly to beginning retained eamings The income effect of the accounting change is spread over the current and future periods