House Depot Company Hired a New Store Manager in March

Essay

House Depot Company hired a new store manager in March 20C, who determined the ending inventory on December 31, 20C, to be $20,000. In March, 20E the company discovered that the 20C ending inventory should have been $28,000. The December 31, 20D, inventory was correct. Ignore income taxes.
Complete the following table to show the effects of the inventory error on the four amounts listed. Give the amount of the discrepancy and indicate whether it was overstated (O), understated (U), or had no effect (N).