Grants Corporation prepared the following two income statements (simplified for illustrative purposes): First Quarter $ 11,900 Second Quarter $19,300 Sales revenue Cost of goods sold Beginning inventory Purchases Goods available for sale Ending inventory Cost of goods sold Gross profit Expenses Pretax income $ 3,600 3,200 6,800 3,800 $ 3,800 12,500 16,300 9,800 3,000 8,900 4,100 $ 4,800 6,500 12,800 5,700 $ 7,100 During the third quarter, it was discovered that the ending inventory for the first quarter should have been $4,350. 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. 4. Prepare the schedule to reflect the comparative effects of the correct and incorrect amounts on the income statement. Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 and 2 Reg 3 Req 4 Prepare corrected income statements for each quarter. First Quarter Second Quarter $ 11,900 $ 19,300 Sales revenue Cost of goods sold: Beginning inventory Purchases $ $ 4,350 3,600 3,200 12,500 Goods available for sale 6,800 16,850 2,450 Cost of goods sold Gross profit 9,450 7,050 12,250 5,700 Expenses 4,100 Pretax income 5,350 $ 6,550 X Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 and 2 Reg 3 Reg 4 Prepare the schedule to reflect the comparative effects of the correct and incorrect amounts on the income statement. 1st Quarter 2nd Quarter Incorrect Correct Error Incorrect Correct Error $ 3,600 $ 3,600 No error 9,800 9,800 No error Beginning inventory Ending inventory Cost of goods sold Gross profit Pretax income