Use the Following Information for the Following Questions:
Giselle

question 146

Multiple Choice

Use the following information for the following questions:
Giselle Ltd. is a calendar-year corporation. Its financial statements for the years 2020 and 2019 contained errors as follows:
$$\begin{array} { l l l } &2020&2019\\\text { Ending inventory } & \$ 2,000 \text { overstated } & \$ 3,000 \text { overtated } \\\text { Depreciation expense } & \$ 6,000 \text { understated } & \$ 12,000 \text { overstated }\end{array}$$
-Assume that no correcting entries were made at December 31, 2019, or December 31, 2020 and that no additional errors occurred in 2021. Ignoring income taxes, by how much will working capital, at December 31, 2021 be overstated or understated?

• A) $0
• B) $4,000 overstated
• C) $4,000 understated
• D) $6,000 understated

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Definitions:

Relocating

The act of moving to a different place or position, often for work or personal reasons.

Personal Time

An individual's free time not occupied by work or obligatory activities, allowing for rest, hobbies, or personal pursuits.

Tax Withheld

Refers to income tax that is deducted directly from an employee's salary and paid to the government by the employer.

Marital Status

A legal or social recognition of a person's relationship, indicating whether they are single, married, divorced, etc.