ElTect of Errors in Physical Inventory Missouri River Supply Co. sells canoes, kayaks, whitewater rafts, and other boating supplies. During the taking or its physical inventory on December 31, 202, Missouri River Supply incorrectly counted its inventory as $552,380 instead of the correct amount of 5671,950. Enter all amounts as positive numbers a. Suate the effect of the error on the December 31, 2012, balance sheet of Missouri River Supply Balance Sheet Items Understated/Overstated Amount Merchandise Inventory $ Understated Understated Current Assets Total Assets Understated Owier's Equity Understated b. State the effect of the error on the income statement of Missouri River Supply for the year ended December 31, 2042. Income Statement Items Amount Cost of Merchandise Sold Overstated/Understated Overstated Understated Gross Profit Net Income Understated c. If uncorrected, what would be the effect of the error on the 20Y3 income statement? Income Statement Items Overstated/Understated Amount Cast af Merchandise Sold Understated Gross Profit Overstated Net Income Overstated d. If uncorrected, what would be the effect of the error on the December 31, 2013, balance sheet? 1. The December 31, 2013, balance sheet would be correct, since the 2012 Inventory error reverses itself in 2013. 2. The December 31, 2013, balance sheet would be incorrect, since the 2012 inventory error overstates the beginning inventary in 2013. 3. The December 31, 2013, balance sheet would be incorrect, since the 2012 inventory error understates the beginning inventory in 2012. 1