Described the potential financial statement misstatements based on the statement below:

1. Inventory is understated because warehouse personnel overlooked several racks of parts in taking the physical inventory.
2. Inventory is overstated because warehouse personnel included inventory items received subsequent to year-end while recording the purchase in the subsequent year to hide inventory shortages.
3. Inventory is overstated because management instructed computer personnel to make changes in the file used to price inventories.