You have been engaged to review the financial statements of Pronghorn Corporation. In the course of your examination, you conclude that the bookkeeper hired during the current year is not doing a good job. You notice a number of irregularities as follows.

The reported net incomes for the first 2 years of Martinez Products, Inc., were as follows: 2020, $ 151,800; 2021, $ 198,000. Early in 2022, the following errors were discovered.

1.		Depreciation of equipment for 2020 was overstated $ 17,900.
2.		Depreciation of equipment for 2021 was understated $ 42,300.
3.		December 31, 2020, inventory was understated $ 51,500.
4.		December 31, 2021, inventory was overstated $ 15,500.