Merry Corp. overstated the cost of its inventory at 12/31/20 by $25,000. Its physical inventory count was correct in the subsequent year, 2021. 8. As a result of the 2020 error, what will be the effect on Merry's cost of goods sold, net income, inventory, and retained earnings balances at the end of 2020? Ignore tax effects. Cost of Goods Sold Net Income Inventory Retained Earnings A. Understated $25,000 Overstated $25,000 Overstated $25,000 Overstated $25,000 B. Understated $25,000 Understated $25,000 Understated $25,000 Understated $25,000 C. Overstated $25,000 Overstated $25,000 Overstated $25,000 Overstated $25,000 D. Understated $25,000 Overstated $25,000 No effect No effect E. Overstated $25,000 Understated $25,000 Understated $25,000 Understated $25,000 9. Assuming the error from 2020 was never corrected, what will be the effect on Merry's cost of goods sold, net income, inventory, and retained earnings balances at the end of 2021 (the subsequent year)? Ignore tax effects. + A. B. Cost of Goods Sold Net Income Inventory Retained Earnings No effect No effect No effect No effect Overstated $25,000 Understated $25,000 Overstated $25,000 Overstated $25,000 Understated $25,000 Overstated $25,000 Overstated $25,000 Understated $25,000 Overstated $25,000 Understated $25,000 No effect Understated $25,000 Overstated $25,000 Understated $25,000 No effect No effect Understated $25,000 Overstated $25,000 No effect Overstated $25,000 F. 10. At the start of 2020, Taylor Corp.'s beginning inventory was overstated by $10,000. In addition, during 2020, Taylor understated its net purchases by $25,000. The cost of ending inventory at 12/31/20 is correctly stated. Before reflecting on any adjustments for the above error items, Taylor's net income on its 2020 income statement was $1,500,000. What should Taylor report as its corrected net income for 2020? Ignore income tax effects. A. $1,535,000 B. $1,485,000 C. $1,465,000 D. $1,515,000 E. None of the above