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The following information comes from the accounting records of Ocean Breeze Enterprises

Inc. over its last few years of operations. Ocean Breeze Enterprises has a December $31$ year

end:

$$

$($a$)$ On December $31,2022,$ the company had salaries owing to employees of the

following amount:.

Accrued salaries $-$ $ $31,025$

$-$ These salaries were recorded twice.

$$

$($b$)$ An insurance premium was prepaid in $2021,$ covering the $2022,2023,$ and $2024$

calendar years. The entire amount was recorded as insurance expense during the

$2021$ year.

$$

$-$ Amount paid for the insurance premium in $2021-$ $$21,538$

$$

C$)$ At the end of the $2022$ year, the company neglected to record a purchase of

inventory on account. This merchandise was also omitted from the year$-$end

inventory count.

$-$ Amount of the inventory purchase $$46,538$

$$

d$)$ On July $1,2021,$ the company purchased a patent. The patent is being amortized

on a straight$-$line basis over its remaining useful life. However, at the beginning of

$2023,$ the company determined that the useful life of the patent was shorter than

was originally anticipated.

$-$ Cost of the patent $-$ $$126,025$

$-$ Original estimated useful life of patent $($in years$)11$

$-$ Estimated useful life of patent as revised $($in years$)-8$

$$

Note that the books for Ocean Breeze Enterprises are closed for $2022$ and for all prior years.

$$

Do the following for each of the above items:

$$

$$

$1.$ Indicate whether the item is a change in accounting policy, change in accounting

estimate, or an error that needs to be corrected.

Indicate whether retained earnings is overstated or understated as of January $1,$

$2023.$

$2.$Indicate the amount by which retained earnings is misstated, if applicable.

Round all calculations to $2$ decimal places. Ignore the effect of income taxes in

making any applicable calculations.

$3.$ Prepare any journal entries required in $2023$ for each of the above items.

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