Answer:
Assets understated by $660,000, liabilities understated by $198,000, and shareholders' equity understated by $462,000
Explanation:
Calculation to determine the effect of this error on Berkshire's December 31, 2020 balance sheet
BERKSHIRE'S December 31, 2020 balance sheet
Assets=$660,000 Understated
Liabilities=$198,000 Understated
Shareholders' equity = $462,000 Understated
($660,000-$198,000)
Therefore the effect of this error on Berkshire's December 31, 2020 balance sheet will be:
Assets understated by $660,000, Liabilities understated by $198,000, and Shareholders' equity understated by $462,000