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T. The records of your audit client, SU'irr Corp, which maintains records under cashbasis, revealed total payments made to suppliers of merchandise amounted to P1,250,000. Further investigation revealed the following additional information: 111(2019 12;31;2019 Accounts Payable 25,000 Notes Payable Trade T5,000 Merchandise Inventories 190,000 Purchase Discounts Purchase returns before any payments were made, thus, credit memos were received from suppliers Purchase returns after payments were made, thus, cash received from suppliers as refunds Compute for the cost of goods sold under the accrual method? 108,000 42,000 245,000 54,000 60,000 15,000 Cline Company's December 31 yearend nancial statements contained the following errors: 12/31/15 12/31f16 Ending inventory P3,000 P4,400 Understated Overstated Depreciation expense P800 Understated An insurance premium of P?,2 00 was prepaid in 2015 covering the years 2015, 2016, and 201?. The prepayment was recorded with a debit to insurance expense. In addition, on December 31, 2016, fully depreciated machinery was sold for P3300 cash, but the sale was not recorded until 2017. There were no other errors during 2015 or 2016 and no corrections have been made for any of the errors. Ignore income tax considerations. 9. What is the total net effect ofthe errors on the amount of Cline's working capital on December 3 1, 20 1 6? Indicate whether understated or overstated. 10. What is the total effect of the errors on the balance of Cline's retained earnings on December 31, 2016? Indicate whether understated or overstated