Use the Following Information for the Following Questions:
the 2019

question 67

Multiple Choice

Use the following information for the following questions:
The 2019 and 2020 financial statements of Banana Inc. contained the following errors:
$\begin{array}{c}\begin{array}{lll}\\\text {Ending inventory}\\\text { Insurance expense}\end{array}\begin{array}{c}\underline{2019}\\\text {\$ 10,000 \quad overstated}\\\text {4,800 \quad understated}\end{array}\begin{array}{c}\underline{2020}\\\text { \$ 16,000 \quad understated}\\\text {2,600 \quad overstated}\end{array}\end{array}$

-Assuming that none of the errors were detected or corrected, by what amount will 2019 income before taxes be overstated or understated?

• A) $5,200 understated
• B) $5,200 overstated
• C) $14,800 overstated
• D) $14,800 understated

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