Evergreen Carpets€™s books show the following data. In early 2018, auditors found that the ending merchandise inventory for 2015 was understated by $6,000 and that the ending merchandise inventory for 2017 was overstated by $7,000. The ending merchandise inventory at December 31, 2016, 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 two decimals.)

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2017 2016 2015 218,000 $161,000 176,000 Net Sales Revenue Cost of Goods Sold Beginning Merchandise Inventory Net Cost of Purchases Cost of Goods Available for Sale Less: Ending Merchandise Inventory Cost of Goods Sold S 21,000 130,000 151,000 33,000 $ 25,000 98,000 123,000 21,000 41,000 83,000 124,000 25,000 Gross Profit Operating Expenses Net Income 118,000 100,000 75,000 $ 25,000 102,000 59,000 29,000 $30,000 99,000 77,000 43,000 34,000