E9-16 Lazlo Power Tools reported the following comparative income statement for the years ended September 30, 20X2 and 20X1. LAZLO POWER TOOLS Income Statements Years Ended September 30, 20X2 and 20X1 20X2 20X1 Sales revenue. $137,300 $121.700 Cost of goods sold: Beginning inventory. $14,000 $12.800 Net purchases..... 72,000 66,000 Cost of goods available. 86,000 78.800 Ending inventory (16,600) (14,000) Cost of goods sold 69.400 64.800 Gross profit. 67.900 56.900 Operating expenses 30,300 26.100 Net income $ 37.600 $. 30,800 During 20X2. accountants for the company discovered that ending 20X1 inventory was overstated by $3,500. Prepare the corrected comparative income statement for the two-year period, complete with a heading for the statement. What was the effect of the error on net income for the two years combined? Explain your answer.