For each of the following inventory errors occurring in 2013, determine the effect of the error on 2013’s cost of goods sold, net income, and retained earnings. Assume that the error is not discovered until 2014 and that a periodic inventory system is used. Ignore income taxes.

U = Understated O = Overstated NE = Noeffect

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Net Retained Goods Soldc Earnings Cost of (Example)1. Overstatement of ending inventory 2. Overstatement of purchases 3. Understatement of beginning inventory 4. Freight-in charges are understated 5. Understatement of anding inventory Understatement of purchases 7. Overstatement of beginning inventory 8. Understatement of purchases and understatement of ending inventory, by the same amount