Wakowski Company's ending inventory was actually $86,000 but was adjusted and recorded at year end to a balance of $68,000 in error. What would be the impact, if any, on the presentation of the balance sheet and income statement for the year in which that error occurred?

Balance Sheet / Income Statement Item	Understated / Overstated / No Effect
Cash	[ Select ] ["Overstated", "No Effect", "Understated"]
Merchandise Inventory	[ Select ] ["No Effect", "Overstated", "Understated"]
Purchases	[ Select ] ["No Effect", "Overstated", "Understated"]
Current Assets	[ Select ] ["Understated", "No Effect", "Overstated"]
Total Assets	[ Select ] ["Understated", "Overstated", "No Effect"]
Retained Earnings	[ Select ] ["Understated", "Overstated", "No Effect"]
Sales	[ Select ] ["No Effect", "Understated", "Overstated"]
Cost of Goods Sold	[ Select ] ["Overstated", "Understated", "No Effect"]
Gross Profit/Gross Margin	[ Select ] ["Overstated", "No Effect", "Understated"]
Net Income	[ Select ] ["Overstated", "No Effect", "Understated"]