6. On 12/30/2019, Morton Corp. overstated a purchase of inventory on account. Rather than recording the inventory purchase for $75,000, it recorded the amount as $100,000 in both the "Inventory" and "Accounts Payable" accounts. Morton Corp. will not pay for this inventory until early in 2020 Morton's cost of ending inventory per its physical inventory count at the end of 2019 was correct. Because of this purchase error, which of the following statements is true? A. Morton's cost of goods for 2019 is overstated by $25,000, and its net income is overstated by $25,000 B. Morton's cost of goods for 2019 is overstated by $25,000, and its net income is understated by $25,000 C. Morton's cost of goods for 2019 is understated by $25,000, and its net income is understated by $25,000 D. Morton's cost of goods for 2019 is understated by $25,000, and its net income is overstated by $25,000 E. Morton's cost of goods sold is correctly stated, but its net income is overstated by $25,000 F. Morton's cost of goods sold is correctly stated, but its net income is understated by $25,000. G. Both Morton's cost of goods sold and net income are correctly stated for 2019. 7. Assume a company's cost of goods sold is overstated by $300,000 due to an inventory error and it has an income tax rate of 25%. All else being equal, what is the net income effect of this error when taking into account income taxes? A. Net income is understated by $225,000 B. Net income is overstated by $225,000 C. Net income is overstated by $375,000. D. Net income is understated by $375,000. E. Net income is understated by $300,000 F. Net Income is overstated by $300,000