Effects of an Error in Ending Inventory

Waymire Company prepared the partial income statements presented below for 2019 and 2018.

	2019					2018
Sales revenue			$538,200					$483,700
Cost of goods sold:
Beginning inventory	$39,300					$32,100
Purchases	343,200					292,700
Cost of goods available for sale	382,500					324,800
Ending inventory	(46,800)		335,700			(39,300)		285,500
Gross margin			$202,500					$198,200
Operating expenses			(167,200)					(151,600)
Income before taxes			$35,300					$46,600

During 2020, Waymire's accountant discovered that ending inventory for 2018 had been understated by $6,500.