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Dalez Corporation prepared the following two statements of earnings (simplified for illustrative purposes): Second Quarter First Quarter 2017 2017 18,600 Sales revenue $ 11,600

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Dalez Corporation prepared the following two statements of earnings (simplified for illustrative purposes): Second Quarter First Quarter 2017 2017 18,600 Sales revenue $ 11,600 $ Cost of sales Beginning inventory $4,200 $ 4,000 Purchases 3,200 13,200 Cost of goods available for sale 7,400 17,200 Ending inventory 4,000 9,200 Cost of sales 3,400 8,000 10,600 Gross profit 8,200 Expenses (operating) Pretax earnings 5,200 6,200 $ 3,000 $ 4,400 During the third quarter, it was discovered that the ending inventory for the first quarter should have been $4,420. Required: 1. What effect did this error have on the combined pretax earnings of the two quarters? O 420 Understated O 420 Overstated No error < Prev 1 of 5 Next >

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