Use the following information for questions 57 through 59.

Langley Company's December 31 year-end financial statements contained the following errors:

Dec. 31, 2012 Dec. 31, 2013

Ending inventory $15,000 understated $22,000 overstated

Depreciation expense $4,000 understated

An insurance premium of $36,000 was prepaid in 2012 covering the years 2012, 2013, and 2014.

The prepayment was recorded with a debit to insurance expense. In addition, on December 31,

2013, fully depreciated machinery was sold for $19,000 cash, but the sale was not recorded until

2014. There were no other errors during 2013 or 2014 and no corrections have been made for

any of the errors. Ignore income tax considerations.

57. What is the total net effect of the errors on Langley's 2013 net income?

a. Net income understated by $29,000.

b. Net income overstated by $15,000.

c. Net income overstated by $26,000.

d. Net income overstated by $30,000.

58. What is the total net effect of the errors on the amount of Langley's working capital at

December 31, 2013?

a. Working capital overstated by $10,000

b. Working capital overstated by $3,000

c. Working capital understated by $9,000

d. Working capital understated by $24,000

59. What is the total effect of the errors on the balance of Langley's retained earnings at

December 31, 2013?

a. Retained earnings understated by $20,000

b. Retained earnings understated by $9,000

c. Retained earnings understated by $5,000

d. Retained earnings overstated by $7,000

PLEASE PROVIDE WORK.