The company needs to reverse the impact of expensing the machine and account for depreciation for the machine. Depreciation expense is $20,000 {($210,000 - $10,000)/10 years} per year and $60,000 for 3 years. So, depreciation expense has been overstated by $150,000. Prior period adjustment would be $105,000 net of 30% taxes [$150,000 - ($150,000 x 30%)].