Bonita reported cost of goods sold for 2017 of $1,400,800and retained earnings of $5,649,900at December 31, 2017. Bonita later discovered that its ending inventories at December 31, 2016 and 2017, were overstated by $118,990and $34,640, respectively.

1. For 2016, state whether each of the following accounts, Cost of Goods Sold, Net Income, and Retained Earnings, were Overstated or Understated.

2. Determine the corrected amounts for 2017 cost of goods soldandDecember 31, 2017, retained earnings. SHOW CALCULATIONS.