Grants Corporation prepared the following two income statements (simplified for illustrative purposes): First Quarter $ 13,000 Second Quarter $19,900 Sales revenue Cost of goods sold Beginning inventory Purchases Coads available for sale Ending inventory Cost of goods sold Grass profit Expenses Pretax income $ 4.400 3,000 7,400 3,700 S 3,700 12,300 16,000 9,100 3,700 9,300 4,500 4,800 13,000 5,600 $ 7,400 $ During the third quarter, it was discovered that the ending inventory for the first quarter should have been $4,180. Required: 1. What effect did this error have on the combined pretax income of the two quarters? 2. Which quarter's or quarters' (if any) EPS amounts were affected by this error? 3. Prepare corrected income statements for each quarter. 4. Prepare the schedule to reflect the comparative effects of the correct and incorrect amounts on the income statement. Complete this question by entering your answers in the tabs below. Req 1 and 2 1. What effect did this error have on the combined pretax income of the two quarters? 2. Which quarter's or quarters' (if any) EPS amounts were affected by this error? 1. Effect on combined prelax income 2. Quarter(s) Req3 Prepare corrected income statements for each quarter, First Quarter Second Quarter Cost of goods sold: Goods available for sale Cost of goods sold Req 4 Prepare the schedule to reflect the comparative effects of the correct and incorrect amounts on the income statement. 1st Quarter correct $ 4,400 2nd Quarter Correct I ncorrect Incorrect $ 4,400 Error Error No error Beginning inventory Ending inventory 9,100 9,100 No error Cost of goods sold Gross profit Pretax income