Haywood Inc. reported the following information for 2019:
Beginning inventory .............................. $ 25,000
Ending inventory .................................... 50,000
Sales revenue .................................... 1,000,000
Cost of goods sold ................................. 620,000
A physical count of inventory at the end of the year showed that ending inventory was actually $65,000.
Required:
1. What is the correct cost of goods sold and gross profit for 2019?
2. Assuming the error was not corrected, what is the effect on the balance sheet at December 31, 2019? At December 31, 2020?