Use the Following Information for the Following Questions:
Ignore

question 90

Multiple Choice

Use the following information for the following questions:
Ignore taxes.
Peach Inc.'s financial statements for the years 2019 and 2020 contained errors as follows:
$\begin{array}{c}\begin{array}{lll}\\\text {Ending inventory}\\\text { Depreciation Expense}\end{array}\begin{array}{c}\underline{2019}\\\text {\$ 3,000 \quad understated}\\\text {5,500 \quad overstated }\end{array}\begin{array}{c}\underline{2020}\\\text { \$ 5,000 \quad overstated}\\\text {3,500 \quad overstated}\end{array}\end{array}$

-Assuming that the errors made in 2019 were corrected, but that the errors made in 2020 were not detected, by what amount will 2020 income before taxes be overstated or understated?

• A) $5,000 overstated
• B) $8,500 overstated
• C) $1,500 understated
• D) $1,500 overstated

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Definitions:

Hardball Tactic

Aggressive negotiation strategies designed to pressure the opposing party into conceding or agreeing to specific demands, often involving risk.

Contract Zone

The range within which parties can find common ground in negotiations, particularly in the context of collective bargaining or business agreements.

BATNA

Optimal Alternative to a Negotiated Agreement; the best possible course of action that a party can pursue if negotiations break down and no agreement is achieved.

Modified Integrative Bargaining

A negotiation strategy that seeks collaborative solutions, blending competitive and cooperative approaches.