The condensed income statement of ABSOLUTE Corporation for the year ended December 31, 2018 is presented below:

Absolute Corporation

Income Statement

For the year ended December 31, 2018

Sales

1,000,000

Cost of goods sold

(600,000)

Gross income

400,000

Operating expenses

(150,000)

Net income

250,000

The December 31, 2018 audit of the company’s financial statements disclosed the following errors:

•The December 31, 2018 inventory is understated by P31,000.

•Accrued expenses of P4,000 and prepaid expenses of P6,000 were not recognized in the company’s books.

•Sales of P5,000 were not recorded until January 2019, although the goods were shipped in December 2018 and were excluded from the

December 31 physical inventory.

•Purchases of P30,000 made in December 2018 were not recorded although the good were received and properly included in the December

31 physical inventory.

•A machine was sold for P10,000 on July 1, 2018 and the proceeds were credited to Sales account. The machine was acquired on January 1,

2015 for P60,000. At that time, it had an estimated useful life of 6 years with no residual value. No depreciation was recorded on this machine

in 2018.

 What is the corrected net income for the year ended December 31, 2018?

A. 166,000

B. 224,000

C. 228,000

D. 258,000