Regan Company Regan Company Reported Net Income of $95,000 for 2013. Early

Regan Company
Regan Company reported net income of $95,000 for 2013. Early in 2014, the company discovered that its 2013 ending inventory was overstated by $5,000.
-Refer to the information provided for Regan Company. Determine the effects of the inventory errors for 2013.

A) Assets and stockholders' equity would have been overstated by $5,000 on the balance sheet; expenses and net income would have been understated by $5,000 on the income statement.
B) Assets and stockholders' equity would have been overstated by $5,000 on the balance sheet; expenses would have been overstated by $5,000 on the income statement, thus net income would have been understated by $5,000.
C) Assets and stockholders' equity would have been understated by $5,000 on the balance sheet; expenses would have been overstated by $5,000 on the income statement, thus net income would have been understated by $5,000.
D) Assets and stockholders' equity would have been overstated by $5,000 on the balance sheet; expenses would have been understated by $5,000 on the income statement, thus net income would have been overstated by $5,000.