Use the Following Information for Questions

Multiple Choice

Use the following information for questions.
Fairfax Inc.began operations on January 1, 2016.Financial statements for 2016 and 2017 contained the following errors: In addition, on December 31, 2017 fully depreciated equipment was sold for $7,200, but the sale was NOT recorded until 2018.No corrections have been made for any of the errors.Ignore income tax considerations.
-The total effect of the errors on Fairfax's 2017 net income is

A) understated by $94,200.
B) understated by $61,200.
C) overstated by $28,800.
D) overstated by $49,800.