In its year-end physical inventory count, Tire Track Corporation forgot to count tires it had stored outside

Question:

In its year-end physical inventory count, Tire Track Corporation forgot to count tires it had stored outside its warehouse in a trailer. As a result, ending inventory was understated by $7,000. Assuming that this error was not subsequently discovered and corrected, what is the impact of this error on assets, liabilities, and shareholders' equity at the end of the current year? At the end of the next year?

Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...