Effect of inventory errors. On December 30, Year 1, Warren Company received merchandise costing \(\$ 1,000\) and counted it in the December 31 listing of all items on hand. The firm included the cost of the inventory in its ending inventory on the balance sheet on December 31, Year 1. The firm received an invoice on January 4, Year 2, when it recorded the acquisition as a Year 2 acquisition. It should have recorded the acquisition for Year 1. Assume that the firm never discovered the error. Indicate the effect (overstatement, understatement, none) on each of the following amounts (ignore income taxes):

a. Inventory, \(12 / 31 /\) Year 1

b. Inventory, 12/31/Year 2

c. Cost of goods sold, Year 1

d. Cost of goods sold, Year 2

e. Net income, Year 1

f. Net income, Year 2 g. Accounts payable, 12/31/Year 1 h. Accounts payable, 12/31/Year 2 i. Retained earnings, \(12 / 31 /\) Year 2