which answer

On December 31, Year 1, Johnson Corporation sold on account and shipped merchandise with a list price of $75,000 to Gibson Company. The terms of the salio wore #20. FOB shipping point. The merchandise arrived at Gibson on January 5. Year 2. Because of confusion about the shipping terms, the sale was not recorded until January of Year 2 and the merchandise, sold at a markup of 25% of cost, was included in Johnson's inventory on December 31, Year 1. Johnson uses a periodic inventory syshort As a result of the above, Johnson's income before income taxes for the year ended December 31, Your I was A. Understated by $75,000 B. Correctly stated. C. Understated by $15,000 D. Understated by $18,750