Iona Corporation's Ending Inventory as of December 31, Year 1

True/False

Iona Corporation's ending inventory as of December 31, Year 1, was overstated by $28,000. Indicate whether each of the following statements relating to the above error is true or false.________ a)Cost of goods sold is overstated in Year 1 by $28,000.________ b)Net Income is overstated in Year 1 by $14,000.________ c)Retained Earnings at December 31, Year 1 is overstated by $28,000.________ d)Beginning inventory will be understated in Year 2 by $28,000.________ e)Retained Earnings will not be affected by this error at the end of Year 2.