The Year 1 financial statements of Bessières Company reported net income for the year ended December 31, Year 1, of $3 million. On July 1, Year 2, subsequent to the issuance of the Year 1 financial statements, Bessières changed from an accounting principle that is not generally accepted to one that is generally accepted. If the generally accepted accounting principle had been used in Year 1, net income for the year ended December 31, Year 1, would have been decreased by $1 million. On August 1, Year 2, Bessières discovered a mathematical error relating to its Year 1 financial statements. If this error had been discovered in Year 1, net income for the year ended December 31, Year 1, would have been increased by $750,000. What amount, if any, should be included in net income for the year ended December 31, Year 2, because of the items noted above? O $750,000 decrease. O $750,000 increase. O $1,000,000 decrease. $0.

The Year 1 financial statements of Bessières Company reported net income for the year ended December 31, Year 1, of $3 million. On July 1, Year 2, subsequent to the issuance of the Year 1 financial statements, Bessières changed from an accounting principle that is not generally accepted to one that is generally accepted. If the generally accepted accounting principle had been used in Year 1, net income for the year ended December 31, Year 1, would have been decreased by $1 million. On August 1, Year 2, Bessières discovered a mathematical error relating to its Year 1 financial statements. If this error had been discovered in Year 1, net income for the year ended December 31, Year 1, would have been increased by $750,000. What amount, if any, should be included in net income for the year ended December 31, Year 2, because of the items noted above? O $750,000 decrease. O $750,000 increase. O $1,000,000 decrease. $0.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 9MC: Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and...

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