The Accountant for the Bay Company Made an Error, Which

The accountant for the Bay Company made an error, which understated the ending inventory for Year 1 by $7,000. Bay Company uses the perpetual inventory system. Assuming that this error is not caught and corrected, indicate the effect of the error on each of the following items. Write U (understated), O (overstated)or N (not affected)next to each item.Year 2 Beginning Inventory: ________Year 2 Purchases: ________Year 1 Goods Available for Sale: ________Year 1 Net Income: ________Year 1 Retained Earnings ending balance: ________Year 1 Total Assets at end of year: ________Year 2 Net Income: ________Year 2 Retained Earnings ending balance: ________Year 1 Cost of Goods Sold: ________Year 1 Gross Margin: ________