Dallas Corporation prepared the following two income statements:

	First Quarter	Second Quarter
Sales Revenue		$ 18,500		$ 22,200
Cost of Goods Sold
Beginning Inventory	$ 3,700		$ 4,700
Purchases	7,700		12,700
Goods Available for Sale	11,400		17,400
Ending Inventory	4,700		9,700
Cost of Goods Sold		6,700		7,700
Gross Profit		11,800		14,500
Operating Expenses		5,700		6,700
Income from Operations		$ 6,100		$ 7,800

During the third quarter, the companys internal auditors discovered that the ending inventory for the first quarter should have been $5,350. The ending inventory for the second quarter was correct.

Required:

1. What effect would the error have on total Income from Operations for the two quarters combined?
2. What effect would the error have on Income from Operations for each of the two quarters?
3. Prepare corrected income statements for each quarter. Ignore income taxes.

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

Dallas Corporation
Income Statement (Partial)
	First Quarter	Second Quarter