Apple Pie Inc. uses a periodic inventory system. At the end of Year 8, it missed counting some inventory items, resulting in an inventory understatement by $600,000. Assume that Apple Pie has a 30% income tax rate and that this was the only error it made. If undetected, what is the effect of this error on Apple Pie's 12/31/48 balance sheet? A. Assets overstated by $600,000. B. Assets understated by $600,000 and shareholders' equity understated by $600,000. C. Assets understated by $600,000, liabilities understated by $180,000, and shareholders' equity understated by $420,000. OD. Assets understated by $420,000 and shareholders' equity understated by $420,000