Use the Following Information to Solve the Following Questions:
Shanti

Multiple Choice

Use the following information to solve the following questions:
Shanti Inc. is a calendar-year corporation. Its financial statements for the years 2020 and 2019 contained errors as follows:
$$\begin{array} { l l l } &2020&2019\\\text { Ending inventory } & \$ 6,000 \text { overstated } & \$ 16,000 \text { overstated } \\\text { Depreciation experse } & \$ 4,000 \text { understated } & \$ 12,000 \text { overstated }\end{array}$$
-Assume that the proper correcting entries were made at December 31, 2019. By how much will 2020 income before taxes be overstated or understated?

A) $2,000 understated
B) $2,000 overstated
C) $4,000 overstated
D) $10,000 overstated