The Sables Company overstates depreciation by $400 and records the $300 purchase of office supplies on credit with this journal entry:

Office Supplies $300

Cash $300

Indicate the effect of the errors on the Total Liabilities and Working Capital, respectively:

Select one:

a.

Overstated $100, No error

b.

Overstated $100, Understated $300

c.

Understated $300, No error

d.

Understated $300, Understated $300

e.

Understated $300, Understated $700