Korea Hardware reported cost of goods sold as follows:

2012 2013 2014

Beginning Inventory 20,000 30,000 35,000

Cost of goods purchased 150,000 175,000 200,000

Cost of goods available for sale 170,000 205,000 235,000

Ending Inventory 30,000 35,000 50,000

Cost of goods sold 140,000 170,000 185,000

Korea made two errors: (1) 2012 ending inventory was overstated by $4,000 and (2) 2013 ending inventory was understated $3,000. 2014 ending inventory is the correct amount.

Compute the effect on net income for each year.