Dexter, Inc. is a calendar-year corporation. Its financial statements for the years 2019 and 2020 contained the following errors:

2019 2020

Ending inventory $3,000 understated $6,000 overstated

_ __16. Assume that no correcting entries were made related to this information. By how much will 2020 income before taxes be overstated or understated?

A. $ 6,000 understated

B. $ 3,000 understated

C. $ 3,000 overstated

D. $ 9,000 understated

E. There will be no impact on 2020 net Income

___17. What will be the error in Retained Earnings at the end of 2020 after financial statements are complete?

A. $ 6,000 overstated

B. $ 9,000 overstated

C. $ 3,000 overstated

D. $ 6,000 understated

E. $ 9,000 understated