Hanson’s Furniture Outlet reported the following comparative income statement for the years ended June 30, 2010 and 2009.

During 2010, Hanson’s Furniture Outlet discovered that the 2009 ending inventory, as previously reported, was understated by $2,100.
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 your answer.

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Hanson's Furniture Outlet Comparative Income Statement For the years ended December 31, 2010 and 2009 2010 2009 Sales Revenue $187,600 $164,000 Cost of Goods Sold: Beginning Inventory $ 12,300 $ 9,100 Net Purchases 114,500 101,600 Cost of Goods Available 126,800 110,700 Ending Inventory 14,600 12,300 Cost of Goods Sold 112,200 98,400 Gross Profit 75,400 65,600 Operating Expenses Net Income 32,900 $ 42,500 26,700 $ 38,900