An abbreviated income statement for Marged Company for this fiscal year is as follows:

An accountant discovers that the ending inventory is overstated by $5,800. What effect does this have on cost of goods sold, gross profit, and net income in this fiscal year?

Transcribed Image Text:

Net Sales Cost of Goods Sold: Merchandise Inventory, January 1 Delivered Cost of Purchases Goods Available for Sale Less Merchandise Inventory, Dec. 31 Cost of Goods Sold Gross Profit Expenses Net Income $ 13200000|| 25 000 00 $ 157000 00 37000 00 $ 155 000 00 12000000 $ 3500000 50 1800000 1700000