10) Yellow Inc. is a calendar-year corporation. Its financial statements for the years ended 12/31/20 and 12/31/21 contained the following errors: 2020 2021 Salary Expense $40,000 understatement $60,000 overstatement Depreciation expense 15,000 understatement 40,000 overstatement Assume that the 2021 errors were not corrected and that no errors occurred in 2019. By what amount will 2021 income before income taxes be overstated or understated?

2. Investments in equity securities are adjusted to fair value at the end of the period. (True/False)

6. Investments in equity securities can be distinguished as either short-term or long- term investments. Investments in equity securities that are short-term can be further distinguished as either trading or available-for-sale securities. (True/False)

7. Investments in debt securities can be classified as held to maturity investments. Held to maturity debt securities should be valued at the end of the period at amortized cost which is synonymous with carrying value and book value. (True/False)