During the taking of its physical inventory on August 31, 20Y7, Robin Interiors Company incorrectly counted its

Question:

During the taking of its physical inventory on August 31, 20Y7, Robin Interiors Company incorrectly counted its inventory as $543,500 instead of the correct amount of $560,700. Indicate the effect of the misstatement on Robin Interiors’ August 31, 20Y7, balance sheet and income statement for the year ended August 31, 20Y7.