Effect of Inventory Errors During the taking of its physical inventory on December 31, 2014, Kate's Interiors Company incorrectly counted its inventory as $228,025 instead of the correct amount of $250,830. Indicate the effect of the misstatement on Kate's Interiors's December 31, 2014, balance sheet or income statement for the year ended December 31, 2014. For each, select if the amount is overstated or understated. Then, input the over or under amount, entered as a positive value. Cost of merchandise sold Current assets Gross profit Merchandise inventory Net income Owner's equity Total assets Q&A Effect of Inventory Errors During the taking of its physical inventory on December 31, 2014, Kate's Interiors Company incorrectly counted its inventory as $228,025 instead of the correct amount of $250,830. Indicate the effect of the misstatement on Kate's Interiors's December 31, 2014, balance sheet or income statement for the year ended December 31, 2014. For each, select if the amount is overstated or understated. Then, input the over or under amount, entered as a positive value. ory Cost of merchandise sold Current assets Overstated Gross profit hys Understated Merchandise inventory rre No effect 32 Net income Owner's equity Total assets ry c ver t o Effect of Inventory Errors During the taking of its physical inventory on December 31, 2014, k counted its inventory as $228,025 instead of the correct amount of misstatement on Kate's Interiors's December 31, 2014, balance shee ended December 31, 2014. For each, select if the amount is overstat positive value. over or under amount, entered as a Cost of merchandise sold Current assets Balance Sheet Gross profit Income Statement Merchandise inventory Net income Owner's equity Total assets