Kindly answer #3&4

Grants Corporation prepared the following two income statements (simplified for illustrative purposes): First Quarter 2014 $ 12,200 Second Quarter 2014 $ 19,400 $ 3,700 3,200 $ 3,500 12,800 Sales revenue Cost of goods sold Beginning inventory Purchases Goods available for sale Ending inventory Cost of goods sold Gross profit Expenses 6,900 3,500 16,300 9,800 3,400 6,500 8,800 4,500 12,900 5,000 Pretax income $ 4,300 $ 7,900 During the third quarter, it was discovered that the ending inventory for the first quarter should have been $4,020 Required: 1. What effect did this error have on the combined pretax income of the two quarters? Increase 520 Decrease 520 NE 2. Did this error affect the EPS amounts for each quarter? Yes No 3. Prepare corrected income statements for each quarter. First Quarter Second Quarter Cost of goods sold: Goods available for sale Cost of goods sold 4. Prepare the schedule with the following headings to reflect the comparative effects of the correct and incorrect amounts on the income statement. 1st Quarter Correct 2nd Quarter Correct Incorrect Error Incorrect Error Beginning inventory Ending inventory Cost of goods sold Gross profit Pretax income