Use the Following Information for Questions 61 Through 63

question 15

Multiple Choice

Use the following information for questions 61 through 63.
Bishop Co. began operations on January 1, 2014. Financial statements for 2014 and 2015 con- tained the following errors: In addition, on December 31, 2015 fully depreciated equipment was sold for $28,800, but the sale was not recorded until 2016. No corrections have been made for any of the errors. Ignore income tax considerations.
-The total effect of the errors on Bishop's 2015 net income is

• A) understated by $366,800.
• B) understated by $234,800.
• C) overstated by $117,200.
• D) overstated by $249,200.

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Definitions:

Principal Debtor's Debt

The main amount of money that a debtor is obligated to pay back, excluding interest or additional fees.

Oral

Relating to the spoken word or communication by mouth, as opposed to written or non-verbal means.

Writing Requirement

A legal principle stating that certain kinds of contracts or agreements must be in writing to be enforceable.

Promissory Estoppel

A legal principle that prevents a party from retracting a promise which the other party has reasonably relied upon to their detriment.