3 points Livermore Inc. uses a periodic inventory system. At the end of 2021, it missed counting some inventory items, resulting in an inventory understatement by $400,000. Assume that this was the only error it made and ignore income taxes. If undetected, what is the effect of this error on Livermore's December 31, 2021 balance sheet? Assets overstated by $400,000 and shareholders' equity overstated by $400,000. Assets overstated by $400,000 but shareholders' equity is correct. Assets understated by $400,000 but shareholders' equity is correct. O Assets understated by $400,000 and shareholders' equity understated by $400,000. Save A