Branson Electric prepared the following condensed income statements for two successive years.

At the end of 2017 (right-hand column), the inventory was understated by $40,000, but the error was not discovered until after the accounts had been closed and financial statements prepared at the end of 2018. The balance sheets for the two years showed owner's equity of $500,000 at the end of 2017 and $580,000 at the end of 2018. (Branson is organized as a sole proprietorship and does not incur income taxes expense.)
a. Compute the corrected net income figures for 2017 and 2018.
b. Compute the gross profit amounts and the gross profit percentages for each year on the basis of corrected data.
c. What correction, if any, should be made in the amounts of the company's owner's equity at the end of 2017 and at the end of 2018?

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2018 2017 $2,000,000 $1,500,000 250,000 900,0o 900,000 400,000 350,000