Dalez Corporation prepared the following two statements of earnings (simplified for illustrative purposes): Second Quarter First Quarter 2017 2017 21,300 Sales revenue $14,300 $ Cost of sales Beginning inventory $ 5,100 $ 4,900 Purchases 4,100 14,100 Cost of goods available for sale 9,200 19,000 Ending inventory 4,900 10,100 Cost of sales 4,300 8,900 10,000 12,400 Gross profit Expenses (operating) Pretax earnings 6,100 7,100 $ 3,900 $ 5,300 During the third quarter, it was discovered that the ending inventory for the first quarter should have been $5,410. Required: 1. What effect did this error have on the combined pretax earnings of the two quarters? 510 Understated 510 Overstated No error 2. Did this error affect the earnings per share amounts for each quarter? Yes No 3. Prepare corrected statements of earnings for each quarter. Cost of sales: First Quarter 2017 Second Quarter 2017 0 $ 0 0 0 $ EA 0 0 0 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.) Statement of Earnings Item Beginning inventory Ending inventory Cost of sales Gross profit Pretax earnings First Quarter 2017 Second Quarter 2017 Incorrect Amount Correct Amount Error (if any) Incorrect Amount Correct Amount Error (if any)