Dallas Corporation prepared the following two income statements:

First Quarter Second Quarter

Sales Revenue $ 19,500 $ 23,400

Cost of Goods Sold

Beginning Inventory $ 3,900 $ 4,900

Purchases $7,900 12,900

Goods Available $11,800 17,800

Ending Inventory 4,900 9,900

Cost of Goods Sold 6,900 7,900

Gross Profit 12,600 15,500

Operating Expenses 5,900 6,900

Income from Ops $ 6,700 $ 8,600

During the third quarter, the companys internal auditors discovered that the ending inventory for the first quarter should have been $5,650. The ending inventory for the second quarter was correct.

Question:

A) What effect would the error have on total Income from Operations for the two quarters combined?

B) What effect would the error have on Income from Operations for each of the two quarters?

C) Prepare corrected income statements for each quarter. Ignore income taxes.