$ Dalez Corporation prepared the following two statements of earnings (simplified for illustrative purposes): First Quarter 2017 Second Quarter 2017 Sales revenue $13,400 20,400 Cost of sales Beginning inventory $4,800 $ 4,600 Purchases 3,800 13,800 Cost of goods available for sale 8,600 18,400 Ending inventory 4,600 9,800 Cost of sales 4,000 8,600 Gross profit Expenses operating) 9,400 5,800 11,800 6,800 Pretax earnings $ 3,600 $ 5,000 During the third quarter, it was discovered that the ending inventory for the first quarter should have been $5,080. Required: 1. What effect did this error have on the combined pretax earnings of the two quarters? 480 Understated 480 Overstated No error 3. Prepare corrected statements of earnings for each quarter. First Quarter 2017 Second Quarter 2017 Cost of sales: 4. Set up a schedule with the following headings to reflect the comparative effects of the correct and incorrect amounts on the statement of earnings: (Select "Understated" or "Overstated" as applicable. Leave no cells blank; select "No error" from the dropdowns if no error is recognized. Input all amounts as positive values.) Incorrect Amount First Quarter 2017 Correct Amount Error (if any) Incorrect Amount Second Quarter 2017 Correct Error (if any) Amount Statement of Earnings Item Beginning inventory Ending inventory Cost of sales Gross profit Pretax earnings