Problem #$3$

In January of $2022,$ you are reviewing the trial balance of Capstone, Inc. for the year ending $2021$ and note that no accrual had been made for salaries and wages expense for $2021.$ The accrual, in the amount of $$750,000$ is material and should have been recorded in $2021.$ You do find that in $2022,$ the $$750,000$ in salaries and wages expense was recorded when the employees were paid.

Indicate in the boxes below for both of $2021$ and $2022,$ if Net Income and Retained Earnings are Under Stated $($US$),$ Over Stated $($OS$),$ or there is No Effect $($NE$)$ as a result of this oversight.

$\backslash$table$[[,2021,2022],[$Net Income,,$],[\backslash$table$[[$Retained$],[$Earnings$]],,]]$