Dallas Corporation prepared the following two income statements:

	First Quarter 2012						Second Quarter 2012
Sales Revenue				$	15,000					$	18,000
Cost of Goods Sold
Beginning Inventory	$	3,000					$	4,000
Purchases		7,000						12,000
Goods Available for Sale		10,000						16,000
Ending Inventory		4,000						9,000
Cost of Goods Sold					6,000						7,000
Gross Profit					9,000						11,000
Operating Expenses					5,000						6,000
Income from Operations				$	4,000					$	5,000

During the third quarter, the companys internal auditors discovered that the ending inventory for the first quarter should have been $4,400. The ending inventory for the second quarter was correct.

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.