1.Given the following Ending Inventory errors for the Portland Company:

Year	Ending Inventory Error
2020	Overstated $40
2021	Understated $30

Indicate the error in the following items:

Select one:

a.

2022 Net Income	12/31/21 Retained Earnings
Overstated $30	Understated $30

b.

2022 Net Income	12/31/21 Retained Earnings
Understated $30	Overstated $30

c.

2022 Net Income	12/31/21 Retained Earnings
No error	Overstated $70

d.

2022 Net Income	12/31/21 Retained Earnings
No error	No error

e.

2022 Net Income	12/31/21 Retained Earnings
No error	Understated $70