Hull Company reported the following income statement information for the current year:

Sales$427,000 Cost of goods sold: Beginning inventory$157,500 Cost of goods purchased 290,000 Cost of goods available for sale 447,500 Ending inventory 161,000 Cost of goods sold 286,500 Gross profit$140,500

The beginning inventory balance is correct. However, the ending inventory figure was overstated by $37,000. Given this information, the correct gross profit would be:

• $116,500.

• $177,500.

• $140,500.

• $103,500.