Belinda Corp.reported $80, 000 of net income for 2010.The following errors were then discovered: -Ending 2010 accrued expense was overstated by $ \$ 2,000 $
-2010 eame drevenue was overstated by $ \$ 3,000 $.
-Ending 2010 prepaid expense was overstated by $ \$ 500 $.
Ignoring income taxes, the correct 2010 net income is
A)$85, 500
B)$84, 500
C)$78, 500
D)$76, 500

Question

Belinda Corp.reported $80, 000 of net income for 2010.The following errors were then discovered: -Ending 2010 accrued expense was overstated by $ \$ 2,000 $ 
-2010 eame drevenue was overstated by $ \$ 3,000 $. 
-Ending 2010 prepaid expense was overstated by $ \$ 500 $.
 Ignoring income taxes, the correct 2010 net income is
A)$85, 500
B)$84, 500
C)$78, 500
D)$76, 500

Quizplus · Accepted Answer

The net income should be adjusted by subtracting the overstated revenue ($3,000) and adding back the overstated accrued expense ($2,000) and prepaid expense ($500). This results in a decrease of $500, making the correct net income $78,500.

Belinda Corp $2,000 \$ 2,000 $2,000 -2010 Eame Drevenue Was Overstated By

Belinda Corp $\$ 2,000$ -2010 Eame Drevenue Was Overstated By