Next, assume an error occurred during the physical count process that caused the inventory count to be understated (too low) by $500. For example, maybe the company forgot to include some inventory from a back storage area in its inventory count. What can we conclude about how this error affects the financial statements (ex. cost of ending inventory, cost of goods sold, and net income) in the current year? What about in the subsequent year? Hint: Use the formula below for your analysis. Beginning Inventory + Net Purchases - Ending Inventory = Cost of Goods Sold