Wendy CoMade the Following Errors in 2010: -Ending Inventory Was Overstated

question 63

Multiple Choice

Wendy Co.made the following errors in 2010: -Ending inventory was overstated by $\$ 2,000$ .
-Beginning inventory was understated by $\$ 6,000$
-Purchaseswere overstated by $\$ 3,000$ .
Reported net income was $15, 000.The correct 2010 net income was

• A)$26, 000
• B)$20, 000
• C)$10, 000
• D)$ 4, 000

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Definitions:

Call Option Valuation

The process of determining the value of a call option, which gives the holder the right, but not the obligation, to buy an asset at a specified price within a specific time frame.

Slope Approaches

Techniques used to determine the direction and rate of change in data, often applied in statistical and economic models.

Stock's Price

The current market value at which a share of a particular stock can be bought or sold.

Black-Scholes Formula

A mathematical model developed for pricing options, estimating the variation over time of financial instruments.