Necessary Toys Company€™s condensed income statements for two years follow.

After the end of 2014, the company discovered that an error had resulted in an $18,000 understatement of the 2013 ending inventory.
Compute the corrected operating income for 2013 and 2014. What effect will the error have on operating income and owner€™s equity for2015?

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2014 2013 Sales Cost of goods sold Gross margin Operating expenses Income before income taxes $252,000 $210,000 108,000 102,000 102,000 60,000 $ 42,000 150,000 60,000 42,000