Calculator During the taking of its physical inventory on December 31, 2014, Barry's Bike Shop incorrectly counted its inventory as $216,889.00 instead of the correct amount of $164,923.00. What would be the effect on the balance sheet and income statement? Select the correct answer. assets overstated by $51,966.00 retained earnings understated by $51,966.00 net income statement understated by $51,966.00. assets overstated by $216,889.00 retained earnings understated by $164,923.00 no effect on the income statement assets and retained earnings overstated by $51,966.00 net income overstated by $51.966.00, assets and retained earnings overstated by $164,923.00 net income understated by $216,889.00. Previous Next