Use the Following Information for Questions

question 3

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 working capital at December 31, 2017 is that working capital is understated by

• A)$100,200.
• B)$79,200.
• C)$46,200.
• D)$31,200.

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Definitions:

Intercalated Disc

Specialized connections between cardiac muscle cells containing gap junctions and desmosomes, facilitating unified contractions of the cardiac tissue.

Cardiac Muscle Fiber

A type of involuntary striated muscle found in the walls of the heart, enabling it to contract and pump blood throughout the body.

Striation

A series of ridges, furrows or linear marks, often found in muscle tissues or rocks.

Ligamentum Arteriosum

A small ligament that is a remnant of the ductus arteriosus, connecting the pulmonary artery to the descending aorta in the fetal circulation system.