Accounting Principles E6.11 (LO 3) Financial Statement Writing Smart Watch Company reported the following income statement data for a 2-year period. Prepare correct income statements. 2019 2020 Sales $220,000 $250,000 revenue Cost of goods sold 32,000 44,000 Beginning inventory Cost of 173,000 202.000 goods purchased Cost of 205,000 246,000 goods available for sale Ending 44,000 52.000 inventory Cost 161,000 194,000 of goods sold Accounting Principles of goods sold Gross $ 59,000 $ 56,000 profit Smart uses a periodic inventory system. The inventories at January 1, 2019, and December 31, 2020, are correct. However, the ending inventory at December 31, 2019, was overstated $6,000. Instructions a. Prepare correct income statement data for the 2 years. b. What is the cumulative effect of the inventory error on total gross profit for the 2 years? c. Explain in a letter to the president of Smart Watch Company what has happened, i.e., the nature of the error and its effect on the financial statements