You were engaged by ANGEL Corp. to audit its financial statementsfor the first time. In examining the company's books, you discovered that certainadjustments had been overlooked at the end of 2013 and 2014. Moreover, you alsodiscovered that the other items had been erroneously recorded. The saidomissions and other failures for each year are noted below:*

1. What is the total effect of the errors on the 2014 net income?

X Prelim Examination X 1 B PRELIM Auditing Problems X Prelim- Exam 2022 - Google [ X *Homework Help - Q&A from X + V -) C does.google.com/document/d/18syuCWe9eNzih7n18tgBat84hooOMF15zg3yQPOJ UU/edit . . . M Gmail YouTube Maps purcom assignment Prelim Examination... Q2 - INCOME TAXA... INCOME TAX : PRE... The International M... Search the menus (Alt+/) 100% Y Normal text + . . . 2 1 1 1 1 1 1 1 1 17 1 1 12 1 1 13 1 14 15 1 1 1 6 1 1 17 18 1 1 9 . | 70 1 17 1 12 13 1 14 1 15 1 16 17 2013 2014 Prepaid insurance 256,000 205,200 Accrued salaries and wages 582,400 520,000 Accrued interest income 172,800 142,000 MARY + Advances from customers 313,600 374,000 Capital expenditures charged as 376,000 348,000 INE repairs expense Audit notes: dings that you add to the iment will appear here. a. Collections from customers had been recorded as sales but should have been recognized as advances from customers because goods were not shipped until the following year. b. Capital expenditures had been recorded as repairs but should have been charged to the Machinery account; the depreciation rate is 10% per year, but depreciation in the year of expenditures is to be recognized at 5% Based on the above and the result of your audit, answer the following: a. Understated by 251,000 b. Overstated by 216,000 c. Understated by 213,400 + O 6:21 PM