What would be the effect on the income statement and balance sheet if the cost of filling and grading land of $12,000 [payment (i)] was incorrectly classified as Land Improvements rather than Land?

I thought the answer would only be a) "Land would be overstated". but that's incorrect.

Possible answers were; a) Land would be overstated, b) Net Income would be overstated, c) Land Improvements would be overstated, d) Owner's Capital would be understated, e) Depreciation Expense would be understated.