During a Year-End Evaluation of the Financial Records of the Gretchen

question 52

Multiple Choice

During a year-end evaluation of the financial records of the Gretchen Company for the year ended December 31, 2010, the following was discovered: Inventory on Januaty 1,2010, was understated by $\$ 6,000$ .
Invent ofy on December 31,2010 , was under st at ed by $\$ 18,000$ .
Rent of $\$ 20,000$ collected in advance on December 29,2010 , was included in income for 2010.
A probable, reasonably estimated contingent liability of $\$ 30,000$ was not recorded as of December 31,2010
Net income for 2010 (before any of the above items) was $100, 000.The corrected net income, ignoring income taxes, for 2010 should be

• A)$50, 000
• B)$58, 000
• C)$62, 000
• D)$68, 000

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Definitions:

Kin-Work

The efforts and activities conducted by family members to maintain, support, and nurture their kinship networks and relationships.

Family Members

Individuals related by blood, marriage, or adoption who share a significant relational bond.

Social Exchange Theory

Proposes that people seek through their interactions to maximize their rewards and minimize their costs.

Maximize Rewards

A principle often found in social exchange theory, suggesting individuals seek to enter relationships that provide the greatest benefits with the least costs.