During a Year-End Evaluation of the Financial Records of the Matthew

question 23

Multiple Choice

During a year-end evaluation of the financial records of the Matthew Company for the year ended December 31, 2014, the following was discovered:
Inventory on January 1, 2014, was understated by $6,000.
Inventory on December 31, 2014, was understated by $18,000.
Rent of $20,000 collected in advance on December 29, 2014, was included in income for 2014.
A probable, reasonably estimated contingent liability of $30,000 was not recorded as of December 31, 2014.
Net income for 2014 (before any of the above items) was $250,000. The corrected net income, ignoring income taxes, for 2014 should be

• A) $300,000
• B) $208,000
• C) $212,000
• D) $218,000

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Definitions:

Vertices

Plural of vertex; refers to the multiple points where two or more curves, lines, or edges meet, especially as the corner points of polygons or angles.

Hyperbola

A type of smooth curve lying in a plane, defined by its geometric properties or by equations for which it is the solution set.

Asymptotes

Lines that a graph approaches but never touches, indicating behaviour towards infinity in functions or sequences.

Hyperbola

A type of smooth curve lying in a plane, defined as the difference of distances from any point on the curve to two fixed points (foci) being a constant.