Effect of Inventory Errors
During the taking of its physical inventory on December 31, 20Y3, Waterjet Bath Company incorrectly counted its inventory as $728,660 instead of the correct amount of $719,880. Indicate the effect of the misstatement on Waterjet Bath's December 31, 20Y3, balance sheet and income statement for the year ended December 31, 20Y3. Also record the amount of each overstatement or understatement. Enter all amounts as positive numbers.
| Inventory | Balance Sheet | Overstated | $8,780 |
| Current assets | Balance Sheet | Overstated | $8,780 |
| Total assets | Balance Sheet | Overstated | $8,780 |
| Stockholders' equity | Balance Sheet | Overstated | $8,780 |
| Cost of goods sold | Income Statement | Understated | $8,780 |
| Gross profit | Income Statement | Overstated | $8,780 |
| Net income | Income Statement | Overstated | $8,780 |
Difference in amount = $728,660 - $719,880 = $8,780
During the taking of its physical inventory on December 31, 20Y3, Waterjet Bath Company incorrectly counted its inventory as $728,660 instead of the correct amount of $719,880.