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Assignment help 2098

Barbara Company’s year-end December 31, 2016, financial statements contained the following errors: 

·Ending inventory on December 31, 2016, was overstated by $75,000.·Depreciation expense was understated by $7,000.·A two-year insurance policy for 2016 and 2017 in the amount of $14,000 was entirely expensed in 2016.·Investments in common stock of other companies were sold in 2016 at a gain of $10,000, but the sale was not recorded until 2017.

Refer to Exhibit 22-4. The effect of the above errors on the December 31, 2016, reported assets of Barbara is that assets are

understated by $65,000

overstated by $58,000

overstated by $65,000

overstated by $92,000

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