Effect of Inventory Errors 1 During the taking of its physical inventory on December 31, 20Y3, Corbin Company incorrectly counted its inventory as $427,380 instead of the correct amount of $376,095. Indicate the effect of the misstatement on Corbin's December 31, 2043, balance sheet or income statement for the year ended December 31, 2013. For each, select if the amount is overstated or understated. Then, input the over or under amount, entered as a positive value. Cost of goods sold Income Statement Overstated x $ -51,285 X Current assets Balance Sheet Understated x $ -51,285 X Gross profit Income Statement Understated X $ -51,285 x Inventory Balance Sheet Understated x 5 -51,285 x Net income Income Statement Understated X $ -51,285 x Stockholders' equity Balance Sheet Understated X $ -51,285 x Total assets Balance Sheet Understated X -51,285 Overstated Feedback Understated No effect Check My Work When the ending inventory is understated or overstated, consider how this understatement or overstatement affects both current and total assets on the balance sheet. Since cost of merchandise sold is an expense, what is the impact of an understated or overstated expense on gross profit and net income on the income statement and on owner's equity in the balance sheet? Learning Objective 6. 2 Lower-of-Cost-or-Market Method On the basis of the following data, determine the value of the inventory at the lower-of-cost-or-market by applying lower-of-cost-or-market to each inventory item, as shown in Exhibit 9. Market Value per Unit (Net Realizable Value) Item Inventory Quantity Cost per Unit JFW1 81 $32 $29 SAW9 154 16 19