Scarlet Witch Corporation is a small private corporation that sells desktop printers to local businesses and schools. On May 1,2023 , the following were the account balances of Scarlet Witch Corporation: During May 2023, the following transactions took place: May 1: Bought 240 desktop printers for $240 each on account. May 1: Bought a van, paying $12600 cash as a down payment and signed a 10 month $24000,9% note payable for the balance. The company paid $540 to have its company logo printed on the side of the van. The residual value is $9000. The old van was sold for $4800; it cost $54000 and acculumated depreciation up to the date of disposal was $48000. May 10: Sold 120 printers to Nebula Inc. on account. May 12: Oscorp agreed to sign a 90 -day note receivable to replace a $3600 accounts receivable due that day. The interest rate on the note is 9%. May 20: Sold 11 printers to Spiderman Inc. using a VISA card to pay for the transaction. A 5.4% service fee is charged by VISA. May 22: Sold 102 printers to Clint Barton Public School on account. May 24: Returned for credit 6 damaged printers from Nebula Inc., costing $252 each. May 28: Received payment in full from Nebula Inc. for the balance owing. May 28: Wrote off as uncollectable $5700 of accounts receivable. May 29: Paid accounts payable, $13800. May 30: Recovered an accounts receivable that was written off in April, $960. May 31: Paid operating expenses totalling $54600. May 31: Recorded depreciation on the van and the furniture \& fixtures. The company uses straight-line depreciation for the van. The van is estimated to be used for 9 years. The furniture & fixtures are depreciated using the straight-line method over 5 years. There is no residual value on the furniture and fixtures. May 31: Recorded interest on the note payable. May 31: Recorded interest on the notes receivable. May 31: The company records the bad debt expense based on the aging of accounts receivables, which follows: Other Information: 1) The selling price for each of the printers is $660. 2) Scarlet Witch Corporation uses the FIFO method under the perpetual inventory system to account for inventory. 3) In the past, Scarlet Witch Corporation has used the following accounts on their financial statements: Bad Debt Expense, Cost of Goods Sold, Credit Card Fee, Depreciation Expense, Gain on Sale, Interest Expense, Interest Payable, Interest Receivable, Interest Revenue, Loss on Sale, Notes Payable, Notes Receivable, Operating Expenses, Sales Returns, Sales Revenue. Not all accounts have been used each period. 5) Assume Scarlet Witch Corporation overstated its ending inventory by $1560. How does this affect cost of goods sold, gross profit, and net income in the year it was discovered? If the error is undetected, what is the impact on cost of goods sold, gross profit, and net income for the following year. Place your answer under "Requirement 5" in the "Answer" tab using the drop down menus. Enter the amount of the over/understatement (if any) in the designated spots. \begin{tabular}{|l|l|l|} \hline \multicolumn{3}{|c|}{ Requirement 5: } \\ \hline \multicolumn{1}{|c|}{ Current Year: } \\ \hline \multicolumn{1}{|c|}{ Account } & Affect (select from drop down menu) & Amount (type in your answer) \\ \hline Cost of Goods Sold & & \\ \hline Gross Profit & & \\ \hline Net Income & \multicolumn{1}{|c}{ Following Year: } \\ \hline \multicolumn{1}{|c|}{ Account } & Affect (select from drop down menu) & Amount (type in your answer) \\ \hline Cost of Goods Sold & & \\ \hline Gross Profit & & \\ \hline Net Income & & \end{tabular} Scarlet Witch Corporation is a small private corporation that sells desktop printers to local businesses and schools. On May 1,2023 , the following were the account balances of Scarlet Witch Corporation: During May 2023, the following transactions took place: May 1: Bought 240 desktop printers for $240 each on account. May 1: Bought a van, paying $12600 cash as a down payment and signed a 10 month $24000,9% note payable for the balance. The company paid $540 to have its company logo printed on the side of the van. The residual value is $9000. The old van was sold for $4800; it cost $54000 and acculumated depreciation up to the date of disposal was $48000. May 10: Sold 120 printers to Nebula Inc. on account. May 12: Oscorp agreed to sign a 90 -day note receivable to replace a $3600 accounts receivable due that day. The interest rate on the note is 9%. May 20: Sold 11 printers to Spiderman Inc. using a VISA card to pay for the transaction. A 5.4% service fee is charged by VISA. May 22: Sold 102 printers to Clint Barton Public School on account. May 24: Returned for credit 6 damaged printers from Nebula Inc., costing $252 each. May 28: Received payment in full from Nebula Inc. for the balance owing. May 28: Wrote off as uncollectable $5700 of accounts receivable. May 29: Paid accounts payable, $13800. May 30: Recovered an accounts receivable that was written off in April, $960. May 31: Paid operating expenses totalling $54600. May 31: Recorded depreciation on the van and the furniture \& fixtures. The company uses straight-line depreciation for the van. The van is estimated to be used for 9 years. The furniture & fixtures are depreciated using the straight-line method over 5 years. There is no residual value on the furniture and fixtures. May 31: Recorded interest on the note payable. May 31: Recorded interest on the notes receivable. May 31: The company records the bad debt expense based on the aging of accounts receivables, which follows: Other Information: 1) The selling price for each of the printers is $660. 2) Scarlet Witch Corporation uses the FIFO method under the perpetual inventory system to account for inventory. 3) In the past, Scarlet Witch Corporation has used the following accounts on their financial statements: Bad Debt Expense, Cost of Goods Sold, Credit Card Fee, Depreciation Expense, Gain on Sale, Interest Expense, Interest Payable, Interest Receivable, Interest Revenue, Loss on Sale, Notes Payable, Notes Receivable, Operating Expenses, Sales Returns, Sales Revenue. Not all accounts have been used each period. 5) Assume Scarlet Witch Corporation overstated its ending inventory by $1560. How does this affect cost of goods sold, gross profit, and net income in the year it was discovered? If the error is undetected, what is the impact on cost of goods sold, gross profit, and net income for the following year. Place your answer under "Requirement 5" in the "Answer" tab using the drop down menus. Enter the amount of the over/understatement (if any) in the designated spots. \begin{tabular}{|l|l|l|} \hline \multicolumn{3}{|c|}{ Requirement 5: } \\ \hline \multicolumn{1}{|c|}{ Current Year: } \\ \hline \multicolumn{1}{|c|}{ Account } & Affect (select from drop down menu) & Amount (type in your answer) \\ \hline Cost of Goods Sold & & \\ \hline Gross Profit & & \\ \hline Net Income & \multicolumn{1}{|c}{ Following Year: } \\ \hline \multicolumn{1}{|c|}{ Account } & Affect (select from drop down menu) & Amount (type in your answer) \\ \hline Cost of Goods Sold & & \\ \hline Gross Profit & & \\ \hline Net Income & & \end{tabular}