Amount Effect of Errors in Physical Inventory Madison River Supply Co. sells canoes, kayaks, whitewater rafts, and other boating supplies. During the taking of its physical inventory on December 31, 2048, Madison incorrectly counted its inventory as $545,000 instead of the correct amount of $555,400. a. State the effects of the error on the December 31, yoye, balance sheet of Madison River Supply. Balance Sheet Items Understated / Overstated Inventory Current Assets Total Assets Stockholders' Equity b. State the effects of the error on the income statement of Madison River Supply for the year ended December 31, 20Y8 Income Statement Items Overstated / Understated Cost of Goods Sold Gross Profit Net Income c. If uncorrected, what would be the effects of the error on the 2049 income statement? Income Statement Items Overstated / Understated Cost of Goods Sold Gross Profit Net Income d. If uncorrected, what would be the effects of the error on the December 31, 2079, balance sheet? 1. The balance sheet would be correct, because the 2048 inventory error reverses itself in 2049. 2. The income for 2049 would be understated. 3. The current assets in 2019 would be overstated. 4. The current assets in 2049 would be understated. Amount Amount