Haywood Inc. reported the following information for Year 1: A physical count of inventory at the end of the year showed that ending inventory was actually $65,000. Required: 1. What is the correct cost of goods sold and gross profit for Year 1 ? 2. Assuming the error was not corrected, what is the effect on the balance sheet at December 31 , Year 1 ? At December 31 , Year 2 ? December 31, Year 1 December 31, Year 2