Inventory Errors Haywood Inc. reported the following information for 2018: Beginning inventory $25,000 Ending inventory 53,440 Sales revenue 1,000,000 Cost of goods sold 620,000 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 2018?

Assuming the error was not corrected, what is the effect on the statement of financial position at December 31, 2018?