Hudson, Inc. is a calendar-year corporation. Its financial statements for the years 2019 and 2018 contained errors
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Question:
Hudson, Inc. is a calendar-year corporation. Its financial statements for the years 2019 and 2018 contained errors as follows: 2019 2018 Ending inventory $3,000 overstated $8,000 overstated Depreciation expense $2,000 understated $6,000 overstated Assume that the proper correcting entries were made at December 31, 2018. By how much will 2019 income before taxes be overstated or understated?
Select one:
a. $1,000 overstated
b. $1,000 understated
c. $2,000 overstated
d. $5,000 overstated
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