III.Question 13

Flint, Inc. is a calendar-year corporation. The ending inventory on Flints balance sheet was overstated by $8,000 in 2019 and understated by $5,000 in 2020 due to counting errors. These errors were not discovered or corrected.

• 1. By how much will 2020 cost of goods sold be overstated or understated? Also specify whether overstated or understated.
  2. By how much will retained earnings at December 31, 2020 be overstated or understated? Also specify whether overstated or understated, and ignore taxes.

A short and correct answer is enough, thank you!