Nickels Company reports net income of $88,550 in 2014. However, ending inventory was understated by $7,100.

What is the correct net income for 2014? What effect, if any, will this error have on total assets as reported in the balance sheet at December 31, 2014?

Total assets in the balance sheet will be understated by the amount that ending inventory is understated now contains modified data, $? .