If Diamond,Inc $\begin{array}{rrr}\text { Effect on 2018 Net Income } & & \text { Effect on 2017 Net Income } \\\end{array}$

Short Answer

If Diamond,Inc.overstates its ending inventory balance for 2018 by $10,000 and understates its ending inventory balance for 2017 by $5,000 what are the effects on its net income for 2018 and 2017 if either error is corrected?
$\begin{array}{rrr}\text { Effect on 2018 Net Income } & & \text { Effect on 2017 Net Income } \\\end{array}$
a. $\begin{array}{rrr}\text { Overstated by } \$ 15,000 & & \text { Understated by } \$ 10,000 \\\end{array}$
b. $\begin{array}{rrr}\text { Understated by } \$ 5,000 && \text { Overstated by } \$ 10,000 \\\end{array}$
c. $\begin{array}{rrr}\text { Overstated by } \$ 15,000 && \text { Understated by } \$ 5,000 \\\end{array}$
d. $\begin{array}{rrr}\text { Overstated by } \$ 10,000 && \text { Understated by } \$ 5,000\end{array}$