Capacitantes #3 EI estudiante re se presentan los cambios en principios contables en los estados financieros. SELECT THE BEST ANSWER (Shows computations are required) 1. A company switched from the cash basis to the accrual basis for recognizing warranty expense even though the warranty liability was always material. The unrecorded liability for warranties was $2 million at the beginning of the year. Its tax rate is 30%. The company booked a year- end warranty liability of $3 million. As a result of this change, the firm would: A. Report a prior period adjustment decreasing retained earnings by $600,000. B. Report a prior period adjustment decreasing retained earnings by $1,400,000. C. Report a current period charge decreasing net income by $600,000 D. Report a current period charge decreasing net income by $1,400,000. 2. In 2018, due to a change in marketing forecasts, Barney Corporation reduced the projected life of its patent for producing round dice. The cumulative patent amortization prior to 2018 would have been $10 million higher have the new life been used. Barney's tax rate is 30%. Barney's retained earnings as of December 31, 2018, would be A. Overstated by $7 million. B. Overstated by $3 million. C. Overstated by $10 million. D. Unaffected