Answer:
Cost of goods sold will be overstated by $4,000 in 2021.
Gross profit will be understated by $4,000 in 2022.
Explanation:
If ending inventory is underestimated, then the cost of goods sold would increase by same amount of underestimated inventory I.e $4,000.
However, since cost of goods would increase by $4,000 in 2021, the gross profit will be underestimated by $4,000 in 2022. This is because the overstatement of cost goods sold have eroded the extra profit that should have been added to the gross profit.
