BVC Began Operations January 1,20x1

question 31

Multiple Choice

BVC began operations January 1,20x1.Financial statements for the year ended December 31,20x1,and 20x2,contained the following errors: In addition,on December 26,20x2,fully depreciated machinery was sold for $21,600 cash,but the sale was not recorded until 20x3. There were no other errors during 20x1 or 20x2,and no corrections have been made for any of the errors.
What is the total pre-tax effect of the errors on 20x2 net income?

• A) $28,400 Overstated
• B) $50,000 Overstated
• C) $53,600 Overstated
• D) $71,600 Overstated

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Definitions:

Anterior Cingulate

A part of the brain involved in a wide range of functions, including emotion, decision-making, and impulse control.

Cognitive Theorists

Psychologists or researchers who study how mental processes such as perception, memory, and reasoning influence behavior.

Ruminative Response

A pattern of behavior where an individual persistently focuses on the symptoms of their distress, and on its possible causes and consequences, instead of solutions.

Psychomotor Retardation

A slowing of thought and a reduction of physical movements in an individual, which can be a feature of major depressive disorder.