Effect of Errors in Physical Inventory Missouri River Supply Co. sells canoes, kayaks, whitewater rafts, and other boating supplies. During the taking at its physical Inventory on December 31, 2012, Missouri River Supply incorrectly counted its inventory as $375,020 instead of the correct amount of 5386,270 Enter all amounts as positive numbers a. State the effect of the error on the December 31, 2012, balance sheet of Missourl River Supply. Understated/Overstated Balance Sheet Items Amount Merchandise Inventory Understated Current Assets Understated Total Assets Understated Owner's Equity Understated b. State the effect of the error on the Income statement of Missouri River Supply for the year ended December 31, 2012 Income Statement Items Overstated/Understated Amount Cost of Merchandise Sold Overstated Gross Profit Understated Net Income Understated c. If uncorrected, what would be the effect of the error on the 2013 income statement? Income Statement Items Overstated/Understated Amount Cost or Merchandise Sold Understated Gross Profit Overstated . Net Income Overstated