Use the following information for questions.
Bishop Co.began operations on January 1, 2010.Financial statements for 2010 and 2011 con- tained the following errors:
In addition, on December 31, 2011 fully depreciated equipment was sold for $28,800, but the sale was not recorded until 2012.No corrections have been made for any of the errors.Ignore income tax considerations.

-The total effect of the errors on Bishop's 2011 net income is

Question

Use the following information for questions.
Bishop Co.began operations on January 1, 2010.Financial statements for 2010 and 2011 con- tained the following errors:
In addition, on December 31, 2011 fully depreciated equipment was sold for $28,800, but the sale was not recorded until 2012.No corrections have been made for any of the errors.Ignore income tax considerations.
 
-The total effect of the errors on Bishop's 2011 net income is

Quizplus · Accepted Answer

The error in recording the depreciation expense understated the expense by $199,200 and the error in recording the sales revenue overstated the revenue by $177,600. The net effect of these errors is to understate net income by $376,800 ($199,200 + $177,600).

Use the Following Information for Questions