Battery Supplies Ltd manufacturing batteries for use in the automotive industry. During the annual audit for 2023/2024, the accountant identified incorrect procedures occurred when conducting the physical stocktake. This led to a discrepancy in determining the ending inventory value. Further investigation of the previous stocktakes identified procedural errors in conducting the physical stocktake had occurred since the change in management in 2020. The following is a summary of the investigation findings:

2021: Ending inventory was overvalued by $22 500.

2022: Ending inventory was overvalued by $55 000.

2023: Ending inventory was undervalued by $28 000.

2024: Ending inventory was overvalued by $18 000.

Required

(a) Explain the effects that the errors would have on the profit figure and ending asset balances for each of the years investigated above.

(b) Calculate the cumulative effect of the errors on profit over the four-year period.