The income statements for Picard Company for the 3 years ending in 2019 appear below.

During 2019, Picard discovered that the 2017 ending inventory had been misstated due to the following two transactions being recorded incorrectly:
a. Inventory costing $37,000 that was returned to the manufacturer (a purchase return) was not recorded. The items were included in ending inventory.
b. A credit purchase of inventory made on August 30, 2017, for $12,800 was recorded twice. The goods were shipped F.O.B. shipping point and were shipped on September 5, 2017.
Required:
1. Was ending inventory for 2017 overstated or understated? By how much?
2. Prepare correct income statements for all 3 years.
3. Did the error in 2017 affect cumulative net income for the 3-year period? Explain your response.
4. Why was the 2019 net income unaffected?