Exhibit 22-6
North Company Has a Fiscal Year Ending on December

Exhibit 22-6
North Company has a fiscal year ending on December 31. Its financial statements for the years ended December
31, 2016 and 2017 contained the following errors: $\begin{array}{lll}&2016&2017\\\hline\text { Ending inventory } & \$ 19,000 \text { understated } & \$ 15,000 \text { overstated } \\\text { Bad debt expense } & 2,000 \text { overstated } & 1,000 \text { understate }\end{array}$ Assume no correcting entries have been made.
-Refer to Exhibit 22-6. By how much was North's 2016 net income overstated or understated?

A) $21,000 overstated
B) $17,000 overstated
C) $17,000 understated
D) $21,000 understated