Question 21 (1 point) Ending inventory at the end of year one was mistakenly overstated (too high). Presuming the error went uncorrected into year two, which of the following is correct: Cost of Goods Sold in year two would be understated. Retained earnings at the end of year two would be overstated. Cost of Goods Sold in year one would be overstated. Net income from year two would be understated. Question 22 12 points) At the beginning of year three, a company discovers that at the beginning of year one, it capitalized a machine at $10,000 and recorded related depreciation expense of $2,000 in each of years one and two. The $10,000 should have been charged to repairs expense. The journal entry made to correct the error in year two will include O a credit to depreciation expense for $4,000 a debit to retained earnings for $6,000 O a credit to accumulated depreciation for $4,000 O a credit to retained earnings of $6,000 Question 23 (2 points) During 2020, Tree Inc. decided to dispose of Lupin Division, considered a separate reportable segment. Tree estimates it can sell Lupin at a loss of $30,000, which it does on May 1, 2020. Lupin's operating income in 2020 was $23,000. Ignoring taxes. Tree's income statement for the year ended December 31, 2020 should report only the income from Tree's other divisions. Since it no longer owns Lupin at December 31, Tree does not need to report anything relating to Lupin's operations during the year. the $23,000 operating income in the body of the income statement and the $30,000 loss in the discontinued operations section of the income statement the $23,000 operating income and the $30,000 loss in the discontinued operations section of the income statement the $23,000 operating income and the $30,000 loss in the body of the income statement