You are provided with the following information on Tapioca Resort Inn: Beginning inventory $40,000 Purchases $30,000 Ending inventory $55,000 Employee meals $1,000 Transfer to Food & Beverage Department $1,500 The goods are sold for $30,000. However, upon a deeper inspection, you noticed that your ending inventory should have been $53,000 instead of $55,000. Based on the available information, you calculate that the profit for this hotel was:

Understated by @2,000

Overstated by $2,000

Overstated by $7,000

Understated by $7,000