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Exercise 9-26 Inventory errors [LO9-7] For each of the following inventory errors occurring in 2018, determine the effect of the error on 2018's and 2019's cost of goods sold, net income, and retained earnings using understated (U), overstated (O), or no effect (NE). Assume that a periodic inventory system is used. Ignore income taxes. Cost of Goods Sold Net Income Retained Earnings 1.Overstatement of 2018 ending inventory 2018 2019 2. A 2018 purchase is not recorded until 2019: 2018 2019 3. Both ending inventory and purchases for r2018 are understated by the same amount 2018 2019 Exercise 9-26 Inventory errors [LO9-7] For each of the following inventory errors occurring in 2018, determine the effect of the error on 2018's and 2019's cost of goods sold, net income, and retained earnings using understated (U), overstated (O), or no effect (NE). Assume that a periodic inventory system is used. Ignore income taxes. Cost of Goods Sold Net Income Retained Earnings 1.Overstatement of 2018 ending inventory 2018 2019 2. A 2018 purchase is not recorded until 2019: 2018 2019 3. Both ending inventory and purchases for r2018 are understated by the same amount 2018 2019