Hallam Company?s financial statements show the following. The company recently discovered that in making physical counts of inventory, it had made the following errors: Inventory on December 31, 2017, is overstated by $18,000 and inventory on December 31, 2018, is understated by $26,000.

Required1. For each key financial statement figure?(a), (b), (c), and (d) above?prepare a table similar to the following to show the adjustments necessary to correct the reported amounts.

2. What is the error in total net income for the combined three-year period resulting from the inventory errors? Explain.

3. Explain why the overstatement of inventory by $18,000 at the end of 2017 results in an overstatement of equity by the same amount in that year.

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For Year Ended December 31 2017 2019 2018 (a) Cost of goods sold.. (b) Net income. (c) Total current assets. (d) Total equity $207,200 $213,800 $197,030 212,270 277,500 315,000 175,800 276,000 314,000 184,910 272,950 346,000 Figure: 2017 2018 2019 Reported amount Adjustments for: 12'31/2017 error 12/31/2018 error Corrected amount