Mountain Stream Carpets' books show the following data. .: (Click the icon to view the income statements.) In early 2026, auditors found that the ending merchandise inventory for 2023 was understated by $6,000 and that the ending merchandise inventory for 2025 was overstated by $7,000. The ending merchandise inventory at December 31, 2024, was correct. Read the requirements. Requirement 1. Prepare corrected income statements for the three years. Data Table Mountain Stream Carpets Income Statement For the Years Ended December 31, 2025, 2024, and 2023 2025 2024 2023 2025 2024 $ 208,000 $ 168,000 $ 173,000 Net Sales Revenue Cost of Goods Sold: Ending Merchandise Inventory Overstated by $7,000 Beginning Merchandise Inventory $ Correct $ 23,000 139,000 $ 27,000 94,000 44,000 82,000 Plus: Net Cost of Inventory Purchased Net Sales Revenue Cost of Goods Available for Sale 121,000 Cost of Goods Sold: 162,000 31,000 126,000 27,000 23,000 Less: Ending Merchandise Inventory 131,000 98,000 99,000 Beginning Merchandise Inventory Plus: Net Cost of Inventory Purchased Cost of Goods Available for Sale Cost of Goods Sold Gross Profit 77,000 70,000 74,000 36,000 53,000 44,000 Less: Ending Merchandise Inventory Operating Expenses $ Cost of Goods Sold 24,000 26,000 38,000 Net Income Gross Profit Operating Expenses Print Done Mat Inn Choose from any list or enter any number in the input fields and then continue to the next question. ? Mountain Stream Carpets' books show the following data. : (Click the icon to view the income statements.) In early 2026, auditors found that the ending merchandise inventory for 2023 was understated by $6,000 and that the ending merchandise inventory for 2025 was overstated by $7,000. The ending merchandise inventory at December 31, 2024, was correct. Read the requirements. Requirement 1. Prepare corrected income statements for the three years. Mountain Stream Carpets Income Statement For the Years Ended December 31, 2025, 2024, and 2023 2025 2024 2023 Ending Merchandise Inventory Overstated by $7,000 Ending Merchandise Inventory Understated by $6,000 Correct Net Sales Revenue Cost of Goods Sold: Beginning Merchandise Inventory Plus: Net Cost of Inventory Purchased Cost of Goods Available for Sale Less: Ending Merchandise Inventory Cost of Goods Sold Gross Profit Operating Expenses Mat Inn Choose from any list or enter any number in the input fields and then continue to the next question. 0 Mountain Stream Carpets' books show the following data. (Click the icon to view the income statements.) In early 2026, auditors found that the ending merchandise inventory for 2023 was understated by $6,000 and that the ending merchandise inventory for 2025 was overstated by $7,000. The ending merchandise inventory at December 31, 2024, was correct Read the requirements. by $7,000 Correct by $6,000 Net Sales Revenue Cost of Goods Sold: Beginning Merchandise Inventory Plus: Net Cost of Inventory Purchased Cost of Goods Available for Sale Less: Ending Merchandise Inventory Cost of Goods Sold Gross Profit Operating Expenses Net Income Requirement 2. State whether each year's net income-before your correctionsis understated or overstated, and indicate the amount of the understatement or overstatement. Year: Prior to correction net income was 2025 2024 2023 Requirement 3. Compute the inventory turnover and days' sales in inventory using the corrected income statement for the three years. (Round all numbers to two decimals.) Choose from any list or enter any number in the input fields and then continue to the next question. Mountain Stream Carpets' books show the following data. (Click the icon to view the income statements.) In early 2026, auditors found that the ending merchandise inventory for 2023 was understated by $6,000 and that the ending merchandise inventory for 2025 was overstated by $7,000. The ending merchandise inventory at December 31, 2024, was correct. Read the requirements. Net Income Requirement 2. State whether each year's net income-before your correctionsis understated or overstated, and indicate the amount of the understatement or overstatement. Year: Prior to correction net income was 2025 2024 2023 Requirement 3. Compute the inventory turnover and days' sales in inventory using the corrected income statement for the three years. (Round all numbers to two decimals.) Select the labels and enter the amounts to compute inventory turnover for each year. (Round your answers to two decimal places, X.XX.) Inventory turnover 2025 times 2024 times 2023 times Now select the labels and enter the amounts to compute days' sales in inventory for each year. (Enter all amounts to two decimal places, X.XX.) = Days' sales in inventory days 2025 = 2024 days days 2023 Choose from any list or enter any number in the input fields and then continue to the next