During 2025 and 2026, Sawyer Corporation experienced several transactions involving plant assets. A number of errors were made in recording some of these transactions. For each item below, indicate the effect of the error(if any) in the blanks provided by using the appropriate terms of: Overstate, Understate, No Effect

if no error was made, choose No Effect in each of the four columns. 2025 2026 Net Book /2025 Net/Net Book /2026 Net Value plant/Income/Value plant/ Income assets at 12/31/25 / assets at 12/31/26

Transaction:

1 the cost of installing a new computer system in 2025 was not recorded in 2025. it was charged to expense in 2026

2. In 2026, clerical workers were trained to use the new computer system at a cost of $15,000, which was erroneously capitalized. The cost is to be written off over the expected life of the new computer system.

3. A major overhaul of factory's machinery in 2025, which extended its useful life by 5 years, was charged to accumulated depreciation in 2925

4. Interest cost qualifying for capitalization in 2025 was charged to interest expenses in 2025.

5. In 2025 land was bought for an employee parking lot. The $2000 title search fee was charged to expense in 2025.

6. The cost of moving several manufacturing facilities from metropolitan locations to suburban areas in 2025 was capitalized. The cost was written off over a 10-year period beginning in 2025.