Grant Pharmaceuticals Ltd.undertook a research and development project in 2017.As of May 1 of that year,management concluded that the project had met the requirements for the capitalization of development costs.For the remainder of 2017 and 2018,the company capitalized $9.9 million of development costs for the project.Had these costs been expensed,the company would have reported losses.In 2019,Grant began amortizing the development cost over the estimated useful life of 10 years,beginning with a full year of amortization in 2019.
In 2022,the auditors concluded that the development cost did not meet the criteria for capitalization.Specifically,Grant did not demonstrate that the company had sufficient financial resources to complete the development project.Grant's management agreed to correct the error in order to obtain a clean audit opinion.The company's tax rate is 30%.
Required:
Record the journal entries necessary to correct Grant's accounts.Include the effect of income taxes.

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The Answer of Grant Pharmaceuticals Ltd.undertook a research and development project in 2017.As of May 1 of that year,management concluded that the project had met the requirements for the capitalization of development costs.For the remainder of 2017 and 2018,the company capitalized $9.9 million of development costs for the project.Had these costs been expensed,the company would have reported losses.In 2019,Grant began amortizing the development cost over the estimated useful life of 10 years,beginning with a full year of amortization in 2019.
In 2022,the auditors concluded that the development cost did not meet the criteria for capitalization.Specifically,Grant did not demonstrate that the company had sufficient financial resources to complete the development project.Grant's management agreed to correct the error in order to obtain a clean audit opinion.The company's tax rate is 30%.
Required:
Record the journal entries necessary to correct Grant's accounts.Include the effect of income taxes.