Myrtle Bay Marine Supply reported the following comparative income statements for the years ended June 30, 2012, and 2011:

Myrtle Bay€™s president and shareholders are thrilled by the company€™s boost in sales and net income during 2012. Then the accountants for the company discover that ending 2011 inventory was understated by $7,500. Prepare the corrected comparative income statements for the two-year period, complete with a heading for the statements. How well did Myrtle Bay really perform in 2012 as compared with2011?

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Myrtle Bay Marine Supply Income Statements For the Years Ended June 30, 2012, and 2011 2012 2011 Sales revenue $136,000 $119,000 Cost of goods sold Beginning inventory Net purchases Cost of goods available Ending inventory Cost of goods sold 15,000 75,000 90,000 (18,000) 11,500 74,000 85,500 (15,000) Gross profit Operating expenses Net income 72,000 64,000 28,000 $ 36,000 70,500 48,500 26,000 $ 22,500