Amount Effect of Errors in Physical Inventory Missouri River Supply Co. sells canoes, kayaks, whitewater rafts, and other boating supplies. During the taking of its physical inventory on December 31, 202, Missouri River Supply incorrectly counted its inventory as $761,190 Instead of the correct amount of $784,030. Enter all amounts as positive numbers. a. State the effect of the error on the December 31, 2012, balance sheet of Missouri River Supply Balance Sheet Items Understated/Overstated Merchandise Inventory Understated Current Assets Understated Understated Owner's Equity Understated b. State the effect of the error on the income statement of Missourl River Supply for the year ended December 31, 2012 Income Statement Items Overstated/Understated Amount Cost of Merchandise Sold Overstated Gross Profit Understated > Total Assets Net Income Understated Income Statement Items Overstated/Understated Amount Overstated Cost of Merchandise Sold Gross Profit Understated Net Income Understated c. If uncorrected, what would be the effect of the error on the 20Y3 income statement? Income Statement Items Overstated/Understated Amount Cost of Merchandise Sold Understated Gross Profit Overstated Net Income Overstated d. If uncorrected, what would be the effect of the error on the December 31, 20Y3, balance sheet? 1. The December 31, 2013, balance sheet would be correct, since the 20Y2 inventory error reverses itself in 20Y3. 2. The December 31, 20Y3, balance sheet would be incorrect, since the 20Y2/inventory error overstates the beginning inventory in 2013. 3. The December 31, 2043, balance sheet would be incorrect, since the 20Y2 inventory error understates the beginning inventory in 20Y3