Exercise 8-25 (Part Level Submission) At December 31, 2016, Pharoah Corporation reported current assets of $394,140 and current liabilities of $198,100. The following items may have been recorded incorrectly. 1. Goods purchased costing $20,520 were shipped f.o.b. shipping point by a supplier on December 28. Pharoah received and recorded the invoice on December 29, 2016, but the goods were not included in Pharoah's physical count of inventory because they were not received until January 4, 2017. 2. Goods purchased costing $13,590 were shipped f.o.b. destination by a supplier on December 26. Pharoah received and recorded the invoice on December 31, but the goods were not included in Pharoah's 2016 physical count of inventory because they were not received until January 2, 2017. 3. Goods held on consignment from Claudia Kishi Company were included in Pharoah's December 31, 2016, physical count of inventory at $12,140. 4. Freight-in of $2,990 was debited to advertising expense on December 28, 2016. (a) Your answer is correct. Compute the current ratio based on Pharoah's balance sheet. (Round ratio to 2 decimal places, e.g. 2.31:1.) The current ratio 1.99):1 (b) Your answer is correct. Recompute the current ratio after corrections are made. (Round ratio to 2 decimal places, e.g. 2.31:1.) The current ratio 2.201:1 (c) By what amount will income (before taxes) be adjusted up or down as a result of the corrections? Assume that goods are sold in item #4. Adjust Income