$$Purchases

$5$

$/$

$1$

$($

balance

$)$

$2$

$,$

$4$

$0$

$0$

$$units @$

$1$

$0$

$5$

$/$

$1$

$2$

$3$

$,$

$0$

$0$

$0$

$$units @$

$5$

$5$

$/$

$2$

$5$

$1$

$,$

$5$

$0$

$0$

$$units @$

$9$

Sales

$5$

$/$

$1$

$4$

$3$

$,$

$8$

$0$

$0$

$$units @$

$1$

$6$

$5$

$/$

$3$

$0$

$1$

$,$

$7$

$0$

$0$

$$units @

$2$

$1$

$$

On June

$9$

$,$

$$when performing the monthly audit for May, Harris

$$

s auditor identified the following transaction: goods costing $

$2$

$,$

$0$

$0$

$0$

$$were sold and shipped to a customer, Buckle Inc., for a sale price of $

$5$

$,$

$7$

$0$

$0$

$$on May

$2$

$8$

$.$

$$The shipping term was FOB shipping point. Harris recorded the sales and adjusted its inventory record when the customer received the goods on June

$5$

$.$

$$Discuss whether, and by how much, this inventory error affects Harris

$$

$$inventory reported on its Balance Sheet of May

$3$

$1$

$$and the cost of goods sold reported in its May income statement

$($

Hint: effects of an inventory error

$)$

$.$