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For the following errors, indicate the net effect on 12/31/26 Working Capital and 2026 Net...

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Accounting

For the following errors, indicate the net effect on 12/31/26 Working Capital and 2026 Net Income, respectively.

  • A 5/1/25, $150,000 cash purchase of ten-year straight-line depreciation equipment was immediately expensed.
  • 2025 Depreciation expense on another piece of equipment was overstated by $20,000.

Select one:

a. No Error, No Error

b. No Error, Overstated

c. No Error, Understated

d. Understated, Understated

e. Understated, Overstated

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