During the taking of its physical inventory on December 31, Barry's Bike Shop incorrectly counted...
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Accounting
During the taking of its physical inventory on December 31, Barry's Bike Shop incorrectly counted its inventory as $204,505 instead of the correct amount of $166,687. The effect on the balance sheet and income statement would be Oa, assets overstated by $37,818 retained earnings understated by $37.818, and not income statement understated by $37.818 Ob. assets overstated by $204,505; retained earnings understated by $166,687, and no effect on the income statement Oc. assets, retained earnings, and net income all overstated by $37.818 Od. assets and retained earnings overstated by $166,687; and net income understated by $204,505
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