Investor Ltd Owns 30% of Investee Ltd

Investor Ltd owns 30% of Investee Ltd.During the year,Investee Ltd had reported a net profit of $500,000 and paid dividends of $50,000.The bookkeeper of Investor Ltd mistakenly used the cost method to account for investments in Investee Ltd.Ignoring tax effect,what is the net effect of this error in the statement of financial position and statement of comprehensive income,respectively?

A) overstate by $150,000; overstate by $150,000;
B) understate by $150,000; understate by $150,000;
C) overstate by $135,000; overstate by $135,000;
D) understate by $135,000; understate by $135,000;
E) None of the given answers.