Cake Mart understated its ending inventory in the current year by $5,000. The company incorrectly reported net income of $100,000. Determine the effect of the error on the financial statements. Multiple choice question. Cost of goods sold will be too high by $5,000, and this caused net income to be understated by $5,000. Total assets on the balance sheet will be too high by $5,000. Cost of goods sold will be too high by $5,000, and this caused net income to be overstated by $5,000. Cost of goods sold was too low by $5,000, which caused net income to be overstated.

For each of the following cases determine the ending balance in the inventory account. (hint: first, determine the total cost of inventory available for sale. next, subtract the cost of the inventory sold to arrive at the ending balance.)a. jill’s dress shop had a beginning balance in its inventory account of $40,000. during the accounting period jill’s purchased $75,000 of inventory, returned $5,000 of inventory, and obtained $750 of purchases discounts. jill’s incurred $1,000 of transportation-in cost and $600 of transportation-out cost. salaries of sales personnel amounted to $31,000. administrative expenses amounted to $35,600. cost of goods sold amounted to $82,300.b. ken’s bait shop had a beginning balance in its inventory account of $8,000. during the accounting period ken’s purchased $36,900 of inventory, obtained $1,200 of purchases allowances, and received $360 of purchases discounts. sales discounts amounted to $640. ken’s incurred $900 of transportation-in cost and $260 of transportation-out cost. selling and administrative cost amounted to $12,300. cost of goods sold amounted to $33,900.a& b. cost of goods avaliable for sale? ending inventory?