Question: Can some please explain. I don't know how to get to the answer and why is it understated Multiple Choice Question 63 Your answer is

Can some please explain. I don't know how to get to

Can some please explain. I don't know how to get to the answer and why is it understated

Multiple Choice Question 63 Your answer is correct. Carla Vista Co. began operations on January 1, 2017. Financial statements for 2017 and 2018 contained the following errors: Dec. 31, 2017 $233000 overstated 133000 overstated Dec. 31, 2018 $254000 understated Ending inventory Depreciation expense Insurance expense Prepaid insurance 97000 understated 97000 overstated 97000 overstated In addition, on December 31, 2018 fully depreciated equipment was sold for $50200, but the sale was not recorded until 2019. No corrections have been made for any of the errors. Ignore income tax considerations. The total effect of the errors on the amount of Carla Vista's working capital at December 31, 2018 is understated by $670200. $537200. O$304200. $207200

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