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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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