The Steege family operates a building supply store and counts the physical inventory once a year. The value assigned to the year-end inventory was $45000. They failed to count the inventory on four shelves in the warehouse. As a result, the year-end financial statements were prepared with an incorrect valuation for ending inventory. A couple of weeks after the statements were prepared, the omission was discovered and reported to the company's accountant. The value of the inventory missed was $3000.

1. Evaluate the effect of the omission on each of the following: cost of goods sold, gross profit, net income, the balance sheet
2. Assume the accountant did NOT correct the error this year, and she permitted this error to be carried forward to the next accounting year. What would be the effect of this error on next year's: income statement, balance sheet?

Please list if it will be overstated or understated or neither and the amount it will be off by.