Ingalls Corporation follows IFRS. Ingalls has prepared the following summary comparative income statements for the years ended December 31, 2017 and 2016. Additional information as of December 31,2017 a. An analysis of collections and losses on accounts receivable during the past 2 years indicates a drop in anticipated losses because of bad debts. After consulting with management, it was agreed to reduce the estimate of bad debts from 4% to 3% of accounts receivable. Below is select information from the balance sheets prepared before the decision was made. b. An analysis of the investments account revealed that these were FV-OCl investments acquired in 2016 . The total market value for the investments at the end of 2016 was $81,000 and at the end of 2017$62,000. On the 2016 and 2017 balance sheets the investments were recorded at $78,000. c. The merchandise inventory at December 31,2016 was overstated by $4,000 and the merchandise inventory at December 31, 2017 was overstated by $6,100. d. On January 1,2016 , equipment costing $12,000 with an estimated useful life of 10 years and a residual value of $1,000 was charged to Operating Expenses. Ingalls uses the straight-line method. e. In 2017, fully depreciated equipment (with no residual value) that originally cost $17,500 was sold as scrap for $2,500. Ingalls credited the cash proceeds of $2,500 to Equipment. f. An analysis of 2016 operating expenses revealed that Ingalls charged to expense a 3-year insurance premium of $2,700 on January 1,2016. Required: 1. Prepare the journal entries to correct the books at December 31, 2017. The books for 2017 have not been closed. Ignore income taxes. 2. Prepare a restated income statement. Show your computations. For this part only assume an income tax rate of 30%