1 2 3 Net Income - Year 1 4 Net Income - Year 2 Is the item overstated or understated? 5 Overstated Understated Overstated O Understated Ending inventory in Year 1 is understated by $2,300 Ending inventory in Year 2 is understated by $1,400 Required: Ignoring income taxes, what effect will the errors have on net income for each of Year 1 and Year 2? X 6 You have been asked to audit the financial statements of Moore Company for two consecutive years. After examining the accounting records, you determine the following: What is the amount of error? $0 $ 7 S 8 9 10 11 12 2 SEQUEO SHOW'S

You have been asked to aud? the financial statements of Moore Company for two consecutive years: After examining the aceounting records, You determine the following - Ending laventory in Year 1 is understated by $2,300 - Ending inventory in Year 2 is understated by $1,400 Required: Ignoring income tawes, what effect wit the errors hove on net income for each of year 1 and Year 27 You have been asked to avdit the financial statemets of Moore Company for two consecutive years. After examining the accounting records, you determine the following: - Ending inventory in Year 1 is understated by 52,300 - Ending inventory in Year 2 is understated by $1,400 Required: Ignoring income taxes, what effect will the errors have on net income for each of Year 1 and Year 2