The accounting records of the Swick's Barbeque Restaurants chain show these data (in millions):

In early \(19 \mathrm{X} 4\), a team of internal auditors discovered that the ending inventory of \(19 \mathrm{X} 1\) had been understated by \(\$ 8\) million. Also, the ending inventory for \(19 \times 3\) had been overstated by \(\$ 5\) million. The ending inventory at December \(31,19 \mathrm{X} 2\), was correct.
\section*{Required}
1. Prepare corrected income statements for the three years.
2. State whether each year's net income as reported here and the related owners' equity amounts are understated or overstated. For each incorrect figure, indicate the amount of the understatement or overstatement.

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Net sales revenue. Cost of goods sold: Beginning inventory... Net purchases...... Cost of goods available.. Less ending inventory. Cost of goods sold. Gross margin. Operating expenses. Net income.... $170 19X3 19X2 $210 $ 15 $ 25 $165 $ 40 19X1 135 100 90 150 125 130 30 15 25 120 110 90 55 74 38 $ 16 $ 17