E7-19 (Algo) (Supplement 7B) Analyzing and Interpreting the Impact of an Inventory Error [LO 7-S2] Dallas Corporation prepared the following two income statements: First Quarter Second Quarter Sales Revenue Cost of Goods Sold Beginning Inventory Purchases $ 16,000 $ 19,200 $ 3,200 7,200 Goods Available for Sale 10,400 Ending Inventory 4,200 $ 4,200 12,200 16,400 9,200 Cost of Goods Sold 6,200 Gross Profit 9,800 Operating Expenses 5,200 Income from Operations $ 4,600 7,200 12,000 6,200 $ 5,800 During the third quarter, the company's internal auditors discovered that the ending inventory for the first quarter should have been $4,600. 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What effect would the error have on total Income from Operations for the two quarters combined? No Effect Two Quarters Combined < Required 1 Required 2 >