G$.$ Douglas Corporation prepared the following two income statements:

First Quarter Second Quarter

Sales Revenue $ $16,400$ $ $20,800$

Cost of Goods Sold

Beginning Inventory $ $4,400$ $ $5,400$

Purchases $9,80013,400$

Goods Available for Sale $14,20018,800$

Ending Inventory $6,80010,400$

Cost of Goods Sold $7,4008,400$

Gross Profit $9,00012,400$

Operating Expenses $6,4008,100$

Income from Operations $ $2,600$ $ $4,300$

During the third quarter, the company$$s internal auditors discovered that the ending inventory for the first quarter should have been $$5,800.$ 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?

multiple choice

$$3200$ understated

$$3200$ overstated

No effect

$2.$ 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.