Use the Following Information for Questions

question 30

Multiple Choice

Use the following information for questions.
Fairfax Inc.began operations on January 1, 2016.Financial statements for 2016 and 2017 contained the following errors: In addition, on December 31, 2017 fully depreciated equipment was sold for $7,200, but the sale was NOT recorded until 2018.No corrections have been made for any of the errors.Ignore income tax considerations.
-The total effect of the errors on Fairfax's 2017 net income is

• A)understated by $94,200.
• B)understated by $61,200.
• C)overstated by $28,800.
• D)overstated by $49,800.

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Definitions:

Mood Disorders

A category of mental health disorders that primarily affect a person’s emotional state, causing disturbances that can significantly impact daily living.

Anxiety Disorders

A group of mental health disorders characterized by significant feelings of anxiety and fear that interfere with daily activities.

Obsessive-Compulsive Disorder

A mental disorder characterized by recurring, unwanted thoughts (obsessions) and repetitive behaviors (compulsions) that an individual feels compelled to perform.

Pharmacological Treatment

The use of drugs or medications as part of a treatment plan for managing or curing illness, diseases, or disorders.