The ending inventory for Carver Co. was incorrectly adjusted, which caused it to be understated by $15,300 for Year 2.

Required
Was each of the following amounts overstated, understated, or not affected by the error?

Transcribed Image Text:

Item No. Year Amount Beginning inventory Year 2 Year 2 Purchases 3 Year 2 Goods available for sale Cost of goods sold Gross margin 4 Year 2 Year 2 Year 2 Net income Year 3 Beginning inventory Purchases 8. Year 3 Year 3 Goods available for sale Year 3 Cost of goods sold Gross margin 10 11 Year 3 12 Year 3 Net income