Evergreen Carpets books show the following data. In early 2016, auditors found that the ending merchandise inventory

Evergreen Carpets’ books show the following data. In early 2016, auditors found that the ending merchandise inventory for 2013 was understated by $ 6,000 and that the ending merchandise inventory for 2015 was overstated by $ 7,000. The ending merchandise inventory at December 31, 2014, was correct.

Requirements
1. Prepare corrected income statements for the three years.
2. State whether each year’s net income—before your corrections—is understated or overstated, and indicate the amount of the understatement or overstatement.
3. Compute the inventory turnover and days’ sales in inventory using the ­corrected income statements for the three years. (Round all numbers to twodecimals.)

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2015 2014 2013 Net Sales Revenue Cost of Goods Sold: 210,000 $ 162,000 169,000 Beginning Merchandise Inventory Net Cost of Furchases Cost of Goods Avalable for Sale Less: Ending Merchandise Inventory Cost of Goods Sold 20,000 140,000 160,000 9,000 $ 27,000 108,000 135,000 20,000 41,000 98,000 139,000 27,000 Gross Profit Operating Expenses Net Income 131,000 79,000 53,000 26,000 115,000 47,000 18,000 S 29,000 112,000 57,000 24,000 S 33,000