Exhibit 22-5 Daniel Company, Having a Fiscal Year Ending on December 31

Multiple Choice

Exhibit 22-5
Daniel Company, having a fiscal year ending on December 31, discovered the following errors in 2014:

A collection of $12,000 from a customer for rent related to January, 2015, was recorded as revenue in 2014.
Depreciation was understated by $600 in 2014.
The January 1, 2013, inventory was overstated by $10,000.
The January 1, 2014, inventory was understated by $6,000.
Exhibit 22-5
Daniel Company, having a fiscal year ending on December 31, discovered the following errors in 2014:
Insurance premiums of $2,000 that relate to 2015 were expensed in 2014 when paid.
Assume no other errors have occurred and ignore income taxes.
-Refer to Exhibit 22-5. Net income for 2014 was

A) overstated by $4,600
B) overstated by $16,600
C) understated by $5,400
D) understated by $5,200