BVC began operations January 1, 20x1. Financial statements for the year ended December 31,

BVC began operations January 1, 20x1. Financial statements for the year ended December 31,
20x1, and 20x2, contained the following errors:
December 31
20x1 20x2
Ending inventory $30,000 overstated
Depreciation expense $12,000 understated
Insurance expense $20,000 overstated $20,000 understated
In addition, on December 26, 20x2, fully depreciated machinery was sold for $21,600 cash, but
the sale was not recorded until 20x3.
There were no other errors during 20x1 or 20x2, and no corrections have been made for any of
the errors.
What is the total pretax effect of the errors on 20x2 net income?
A) $28,400 overstated
B) $50,000 overstated
C) $53,600 Overstated
D) $71,600 overstated