unland, Inc. is a calendar-year corporation. Its financial statements for the years 2021 and 2020 contained errors as follows:

		2021			2020
Ending inventory			$9500 overstated			$25000 overstated
Depreciation expense			$5500 understated			$17500 overstated

Assume that the proper correcting entries were made at December 31, 2020. By how much will 2021 income before taxes be overstated or understated?

$ 4000 overstated

$15000 overstated

$ 7500 overstated

$ 4000 understated

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