J. R. Video Sales Ltd. reported the following data. The shareholders are very happy with J. R.'s steady increase in net income. (Click the icon to view the income statements.) Auditors discovered that the ending inventory for 2015 was understated by $4 million and that the ending inventory for 2016 was also understated by $4 million. The ending inventory at December 31, 2017, was correct. Requirements 1. Show corrected income statements for each of the three years. 2. How much did these assumed corrections add to or take away from J. R's total net income over the three-year period? How did the corrections affect the trend of net income? 3. Will J. R.'s shareholders still be happy with the company's trend of net income? Give the reason for your answer. Requirement 1. Show corrected income statements for each of the three years. J. R. Video Sales Ltd. Income Statements (adapted; amounts in millions) Years Ended December 31, 2017, 2016, and 2015 2017 2016 2015 Net sales revenue Cost of goods sold: Beginning inventory Net purchases Goods available for sale Less: Ending inventory Cost of goods sold Gross profit Total operating expenses Net income Requirement 2. How much did these assumed corrections add to or take away from J. R.'s total net income over the three-year period? How did the corrections affect the trend of net income? How much did these assumed corrections add to or take away from J. R.'s total net income over the three-year period? The assumed corrections over the three-year period. How did the corrections affect the trend of net income? The corrections Requirement 3. Will J. R.'s shareholders still be happy with the company's trend of net income? Give the reason for your answer. Will J. R.'s shareholders still be happy with the company's trend of net income? The shareholders be happy with the trend of net income because the company's Income statements 2015 $ 41 38 J. R. Video Sales Ltd. Income Statements for the Years Ended (Amounts in millions) 2017 2016 Net sales revenue.............. $ 44 Cost of goods sold: Beginning inventory .....$ 11 S 10 Net purchases Goods available for sale Less: Ending inventory (12) Cost of goods sold S 9 24 ......... 36 (11) (10) Gross profit. ................ 17 Total operating expenses Net income.................. S 10 Print Done