Hydro White Water Co$.$ sells canoes, kayaks, whitewater rafts, and other boating supplies. During the taking of its physical inventory on December $31,2014,$ Hydro White Water incorrectly counted its inventory as $$366,240$ instead of the correct amount of $$377,230.$

Enter all amounts as positive numbers.

a$.$ State the effect of the error on the December $31,2014,$ balance sheet of Hydro White Water.

Balance Sheet Items Understated$/$Overstated Amount

Merchandise Inventory

Understated

$fill in the blank $2$

Current Assets

Understated

$fill in the blank $4$

Total Assets

Understated

$fill in the blank $6$

Owner's Equity

Understated

$fill in the blank $8$

b$.$ State the effect of the error on the income statement of Hydro White Water for the year ended December $31,2014.$

Income Statement Items Overstated$/$Understated Amount

Cost of Merchandise Sold

Overstated

$fill in the blank $10$

Gross Profit

Understated

$fill in the blank $12$

Net Income

Understated

$fill in the blank $14$

c$.$ If uncorrected, what would be the effect of the error on the $2015$ income statement?

Income Statement Items Overstated $/$ Understated Amount

Cost of Merchandise Sold

Understated

$fill in the blank $16$

Gross Profit

Overstated

$fill in the blank $18$

Net Income

Overstated

$fill in the blank $20$