An entity had the following opening and closing inventory balances during the current year:

.......................................1/1 ........12/31

Finished goods............... $ 90,000... $260,000

Raw materials ..................105,000 ..130,000

Work-in-progress.............. 220,000 ..175,000

The following transactions and events occurred during the current year:

 $300,000 of raw materials were purchased, of which $20,000 were returned because of defects.

 $600,000 of direct labor costs were incurred.

 $750,000 of production overhead costs were incurred

If the entity’s raw materials inventory as of December 31 of the current year (ending
inventory) was miscounted and the true figure was higher than $130,000, one effect on the
year-end financial statements would be that