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Candle Co. performs an inventory court at year-end. The company records a ending balance of...

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Accounting

Candle Co. performs an inventory court at year-end. The company records a ending balance of $56,000 for inventory on its balance sheet. During the following year, the accountant discovers that the ending inventory was miscounted, causing ending inventory to be overstated by $2,500.
a. What is the effect of the misstatement on the income statement?
b. Besides ending inventory, what was the effect of the error on the balance sheet?

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