Sinclair Auto Parts, Inc., reported the following comparative income statement for the years ended September 30, 2012 and 2011.

During 2012, Sinclair Auto Parts, Inc., discovered that the 2011 ending inventory, as previously reported, was understated by $4,500.

Requirements
1. Prepare the corrected comparative income statement for the two-year period, complete with a heading for the statement.
2. What was the effect of the error on net income for the two years combined? Explain youranswer.

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Sinclair Auto Parts, Inc. Comparative Income Statements For the Years Ended September 31, 2012 and 2011 2012 2011 Sales Revenue Cost of Goods Sold $135,000 $124,000 Beginning Inventory$19,000 Net Purchases Cost of Goods Available 91,000 Ending Inventory Cost of Goods Sold $10.500 69.000 79,500 19,000 18,500 72,500 62,500 24.000 $ 38,500 60,500 63,500 Gross Profit Operating Expenses Net Income S 46,500