Grants Corporation prepared the following two income statements (simplified for illustrative purposes First Quarter Second Quarter Sales revenue Cost of goods sold Beginning inventory 5 11,600 5 19,400 Purchases Goods available for sale Ending inventory Cost of goods sold Gross profit 3 4,400 3,000 7,400 3,700 5 3,700 12,500 16,200 9,900 3,700 7,900 4,200 5 3,700 6,300 13,100 5,200 5 7,900 Pretax income During the third quarter, it was discovered that the ending inventory for the first quarter should have been S4,110. Required: 1. What effect did this error have on the combined pretax income of the two quarters? O Increase by $410 Decrease by S410 O No effect 2. Which quarters (if any) EPS amount were affected by this eror? First Quarter only O Second Quarter only Both quarters O Neither quarter 3. Prepare corrected income statements for each quarter First Quarter Cost of goods sold: Goods available for sale Cost of goods sold