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5) In 2015, Epsilon incorrectly recorded ending inventory as $500 instead of the correct number of $300 (overstatement error). The error was discovered on 1/1/16.

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5) In 2015, Epsilon incorrectly recorded ending inventory as $500 instead of the correct number of $300 (overstatement error). The error was discovered on 1/1/16. Tax rates for all years is 40%. To correct this error, by what amount, and in which direction (increase or decrease) should R.E. be adjusted on 1/1/16

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