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.The effect of the above errors on the December 31, 2010, reported assets of Bonnie is that assets are

Question

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.The effect of the above errors on the December 31, 2010, reported assets of Bonnie is that assets are

Quizplus · Accepted Answer

The total effect of these errors on the reported assets is +$8,000 [($120,000 - $96,000) + ($40,000 - $32,000) + ($54,000 - $50,000) + ($36,000 - $32,000)]. Therefore, assets are overstated by $8,000, and the only answer option that reflects this is D.

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

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