Crane Company offers a five$-$year warranty on its products. Crane previously estimated warranty costs to be $3\%$ of sales but in $2025$

revised this estimate to $1\%$ due to process and quality control improvements. Crane reported warranty costs of $$75600$ on $$2520000$

in $2023$ and $$90600$ on $$3020000$ in $2024.$ Sales revenue for $2025$ was $$5040000.$

What is the adjustment to Retained Earnings in $2025($ignore income tax considerations$)?$

$$0$

$$60600$

$$111000$

$$50400$

In $2025,$ Sandhill Company discovered an error while preparing its $2025$ financial statements. A building constructed at the beginning

of $2024$ costing $$1410000$ has not been depreciated. The estimated useful life of the building is $30$ years with no salvage value.

Straight$-$line depreciation is used. Sandhill properly included depreciation on its tax return also using straight$-$line depreciation.

Income tax payable was also reported correctly at a tax rate of $20\%.$ Income before depreciation expense in $2025$ was $$510000.$ If

single$-$period statements are prepared, how would the prior period adjustment be reported?

A restatement of $$37600$ to the $2024$ Income Statement

As $$47000$ of other income in $2025$

A $$37600$ adjustment to the beginning balance on the Retained Earnings Statement

A restatement of $$47000$ to the $2025$ Balance Sheet