Dole Produce Ltd

question 37

Multiple Choice

Dole Produce Ltd. counted $700 of inventory twice in its December 31, 2016 inventory. On December 31, 2017, it mistakenly omitted $200 of merchandise from its inventory. As a result of these errors:

• A)net income is overstated by $700 in 2016 and understated by $200 in 2017.
• B)net income in understated by $700 in 2016 and overstated by $200 in 2017.
• C)net income is overstated by $700 in 2016 and understated by $900 in 2017.
• D)total net income for 2016 and 2017 is correct.

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Definitions:

S&P 100 Index

An index comprising 100 major, blue chip companies across multiple industries in the United States, used to track stock market performance.

Bull Money Spread

An options strategy involving the purchase of a call option with a lower strike price and the sale of another call option with a higher strike price, aiming to profit from a moderate increase in the price of the underlying asset.

Calls

Financial derivative options that give buyers the right, but not the obligation, to buy a security at a specified price within a specified duration.

Option Position

An option position refers to an investment strategy involving the buying or selling of options, which are derivatives based on the value of underlying securities like stocks.