1. Lotus Blue Pte Ltd Lotus Blue Pte Ltd uses a periodic inventory system. In its physical stock count taken at 31 December 2012, Lotus Blue's employees failed to count the merchandise in the store's window display. The cost of these merchandise amounted to $2,300. Lotus Blue reported a pretax income of $267,000 and $355,000 for the financial year ended 31 December 2012 and 31 December 2013 respectively. Required (i) Compute Lotus Blue's correct pretax income for the year ended 31 December 2012 Determine the effect of the inventory error on the total pretax income over the 2 years ended 31 December 2013. (iii) Does it matter whether the inventory error is corrected or not? Explain