Grow R Us overstated its ending inventory in the current year by $$5,000.$ The company incorrectly reported $$100,000$ of net income. Explain the consequences of this error on the current period's income statement.

Multiple choice question.

The correct net income amount should have been $$105,000.$

Cost of goods sold will be too low by $$5,000.$

Cost of goods sold will be too high by $$5,000.$