**Inventory Adjustment Impact on Financial Statements**If Wakowski Company's ending inventory was actually $86,000 but was adjusted at year-end to a balance of $68,000 in error, what would be the impact on the presentation of the balance sheet and income statement for the year that the error occurred, if any? If no entry is required, select "None" and leave the amount boxes blank.**Balance Sheet:**- Merchandise Inventory: $ ________- Current Assets: $ ________- Total Assets: $ ________- Retained Earnings: $ ________**Income Statement:**- Cost of Goods Sold: $ ________- Gross Profit/Gross Margin: $ ________- Net Income: $ ________

Solution: Small error in inventory valuation would cause a complete error in a financial statement.…

Answered: If Wakowski Company's ending inventory…

FINANCIAL ACCOUNTING

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Chapter1: Financial Statements And Business Decisions

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