Effect of Erors 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 20Y8 Madison incorrectly counted its inventory as785,150 instead of the correct amount o $808,700 Enter all amounts as positive numbers. a. State the effects of the error on the December 31, 20Y8, balance sheet of Madison River Supply Balance Sheet Items 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, 20YB Income Statement Items Cost of Goods Sold Gross Profit Net Income C. If uncorrected, what would be the effects of the error on the 20Y9 income statement? Income Statement Items Cost af Goods Sold Gross Profit Net Income d. If uncorrected, what would be the effects of the error on the December 31, 20Y9, balance sheet? Understated/Overstated Amount Overstated/Understated Amount Overstated Understated Amount 1. The balance sheet would be correct, because the 20Y8 inventory error reverses itself in 20Y9 2 TIhe income for 20Y9 would be understated. 3The current assets in 20Y9 would be overstated. 4The current assets in 20Y9 would be understated