Assume That in Year 1,the Ending Merchandise Inventory Is Overstated

Essay

Assume that in Year 1,the ending merchandise inventory is overstated by $30,000.If this is the only error in Year 1,fill in the items below,indicating which items will be understated(U),overstated(O),or correctly(C)stated for Year 1.
$\begin{array}{ll}\text { Ending merchandise inventory } & \text { Year 1 \_\_\_ } \\\text { Beginning merchand ise inventory } & \text { Year 1\_\_\_ } \\\text { Cost of goods sold } & \text { Year 1 \_\_\_ } \\\text { Gross profit } & \text { Year 1 \_\_\_ } \\\text { Net income } & \text { Year 1 \_\_\_ } \\\text { Ending owner's capital } & \text { Year 1 \_\_\_ }\end{array}$