On January 1, 2019, a maintenance expense of $ 50,000 was incurred and was recorded as an asset in error. The asset was depreciated using a useful life of 5 years and a residual value of 0. What adjustments have to be made in the Excel sheet that is being used to prepare the financial statements for the 2020 10K report even though the error was discovered and was it corrected before closing the 2020 books? (Ignore the tax effect)

Select one:

a. Eliminate the 2020 depreciation expense from the Statement of Income and Expenses for 2020.

b. Adjust the initial balance of retained earnings for 2019 with an adjustment to income from prior periods (prior period adjustment) net of taxes.

c. Eliminate the 2019 depreciation expense from the 2019 Income and Expenses Statement.

d. Adjust the beginning balance of retained earnings for 2020 with a cumulative adjustment to income for changes in principle (cumulative changes in accounting principles) net of taxes.