What is the effect of overstating 2021 depreciation expense? O a. Accumulated depreciation will be understated for 2021. O b. Net income for 2021 will be overstated. O c. Ending retained earnings for 2021 will be understated. O d. Ending retained earnings for 2021 will be overstated. A retailer increases bad debts expense from 2.5% to 3% of credit sales. Given this information, which of the following statements is correct? O a. The net income of prior years is overstated and a retrospective correction should be made. O b. This is a change in estimate and should be treated prospectively. O c. This is a change in accounting policy and treatment is retrospective. O d. This is a correction of an error and a retrospective correction should be made. For a company using the straight-line method of depreciation that changes the estimated useful life from 20 years to 15 years remaining as at the beginning of the year, the accountant should do the following: a. Compute current year depreciation as (carrying amount - residual value) divided by 15 years. O b. Adjust prior year's depreciation. O c. Adjust the amount of accumulated depreciation as at the beginning of the year. Od. Compute current year depreciation as (cost-residual value) divided by 15 years