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If the ending inventory for Year 1 was understated by $400, cost of goods sold in Year 2 will be: a. understated by $800. b.

If the ending inventory for Year 1 was understated by $400, cost of goods sold in Year 2 will be:

a. understated by $800.

b. understated by $400.

c. correct.

d. overstated by $400.

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