$1\_$Berkshire Incorporated uses a periodic inventory system. At the end of $2023,$ it missed counting some inventory items, resulting in an inventory understatement by $$660,000.$ Assume that Berkshire has a $20\%$ income tax rate and that this was the only error it made.

If undetected, what is the effect of this error on Berkshire's December $31,2023$ balance sheet?

Multiple Choice

Assets understated by $$660,000$ and shareholders' equity understated by $$660,000$

Assets understated by $$528,000$ and shareholders' equity understated by $$528,000$

Assets understated by $$660,000,$ liabilities understated by $$132,000$ and shareholders' equity understated by $$528,000$

None of these answer choices are correct.