White Water Co. sells canoes, kayaks, whitewater rafts, and other boating supplies. During the taking of its physical inventory on December 31, 2015, White Water incorrectly counted its inventory as $315,600 instead of the correct amount of $325,000.
a. State the effect of the error on the December 31, 2015, balance sheet.
b. State the effect of the error on the income statement for the year ended December 31, 2015.
c. State the effect of the error on the 2016 balance sheet and the 2016 income statement.