In 2022, Draper Company discovered errors made in 2019-2021, its first three years of operation 2021 2020 2019 Items not recognized Prepaid expenses $1,300 $900 $550 Accrued expenses 950 700 800 Other information: Reported net income $23,000 $25,000 $20,000 4,100 2,600 5,000 Dividends declared and paid Common stock and additional paid in capital at 12/31 22,000 17,000 15,000 Indicate the error in 12/31/21 Working Capital: Select one: a $400 overstated b. $350 overstated c. $400 understated d. $350 understated