While drawing up his financial statements, a trader valued his inventory at cost. He later discovered that $10$ units of inventory, with a cost of $12$ per unit, had been damaged. If he paid $2$ per unit for repairs, he would be able to sell them for $9$ each. What effect would the incorrect inventory valuation have on the income statement?
- Agross profit overstated $30$, profit for the year no effect
- Bgross profit overstated $50$, profit for the year overstated $50$
- Cgross profit understated $30$, profit for the year no effect
- Dgross profit understated $50$, profit for the year understated $50$