Exhibit 23-4 Bonnie Company's Year-End December 31, 2010, Financial Statements $\$ 60,000$

Exhibit 23-4 Bonnie Company's year-end December 31, 2010, financial statements contained the following errors:
Ending inventory on December 31,2010 , was overstated by $\$ 60,000$ .
Depre ciation expense was underst at ed by $\$ \sigma, 000$ .
A two-year insurance policy for 2010 and 2011 in the amount of $\$ 12,000$ was entirely expensed in 2010.
Investments in common stock of other companieswere sold in 2010 at a gain of $\$ 8,000$ , but the sale was not recorded until 2011
- Refer to Exhibit 23-4.What is the effect of the above errors on 2010 net income?

A) Net income is understated by $52, 000.
B) Net income is overstated by $40, 000.
C) Net income is overstated by $58, 000.
D) Net income is overstated by $52, 000.