Can anyone help me understand the formula to understand this question of Inventory Errors?

Thank you

= O MERCHANDISING AND INVENTORY Inventory errors: Problem type 1 You have been asked to audit the financial statements of Sanders Company and report on your findings. After examining the beginning and ending inventory counts and calculations for the current year, you find the following: . Beginning inventory is overstated by $8,200. Ending inventory is understated by $14,000. Management of the company wants to know the effect that the errors will have on certain financial statement items. Required: Ignoring income taxes, determine the effect that the errors will have on the following: Is the item overstated What is the amount of or understated? error? Net Income Overstated Understated $0 Ending inventory O Overstated Understated X 5