During the taking of its physical inventory on December 31, 2014, Barry's Bike Shop incorrectly counted its inventory as $204,778.00 instead of the correct amount of $163,409.00. What would be the effect on the balance sheet and income statement Select the correct answer. assets overstated by $41.369.00 retained earnings understated by $41,369.00 net income statement understated by $41,369.00. assets overstated by $204.778.00 retained earnings understated by $163,409.00 no effect on the income statement. assets and retained earnings overstated by $41,369.00 net income overstated by $41,369.00. assets and retained earnings overstated by $163,409.00 net income understated by $204,778.00