$3\mathrm{.}5$ Effect of Inventory Errors

The net income for the current year for the Morton Company is $$240,000.$ Their reported total assets for the year are $$1,800,000.$ After some calculations, it is determined that at the beginning of the year the inventory was overstated by $$18,000,$ which was never corrected. The current year inventory is correct. The corrected amount for total assets and net income for the year is

$$1,782,000$ and $$222,000.$

$$1,800,000$ and $$258,000.$

$$1,818,000$ and $$258,000.$

$$1,800,000$ and $$240,000.$