Exercise 5-12 Analysis of inventory errors LO A2 Vibrant Company had $970,000 of sales in each of three consecutive years 20162018, and it purchased merchandise costing $535,000 in each of those years. It also maintained a $270,000 physical inventory from the beginning to the end of that three-year period. In accounting for inventory, it made an error at the end of year 2016 that caused its year-end 2016 inventory to appear on its statements as $250,000 rather than the correct $270,000. Required: 1. Determine the correct amount of the companys gross profit in each of the years 20162018. 2. Prepare comparative income statements to show the effect of this error on the company's cost of goods sold and gross profit for each of the years 20162018.