Caribbean Blue Sails, Inc. makes sails for sailboats and canvas awnings for commercial businesses and residential customers. The Caribbean Blue Sails Income Statement is shown below.

Caribbean Blue Sails, Inc. Income Statement For the year ended December 31, 2012
Revenues:
Sales revenue		$136,500
Cost of goods sold:
Beginning inventory	$68,000
Net Purchases	$28,400
Cost of goods available for sale	$96,400
Ending inventory	$46,600
Cost of goods sold:	$49,800
Gross profit		$86,700

 

Assume that during the physical inventory count, bolts of canvas scheduled for production in the current month were counted twice by mistake. The result is that inventory was overstated by $3,615.

How would this error affect the following accounts  on the Income Statement shown above?

Ending inventory	Select an answer understated overstated unaffected by the error
Cost of Goods Available for Sale	Select an answer understated overstated unaffected by the error
Cost of goods sold	Select an answer understated overstated unaffected by the error
Gross Profit	Select an answer understated overstated unaffected by the error