Navajo Companys year-end financial statements show the following. The company recently discovered that in making physical counts of inventory, it had made the following errors: Year 1 ending inventory is understated by $55,000 and Year 2 ending inventory is overstated by $25,000.

For Year Ended December 31	Year 1	Year 2	Year 3
(a) Cost of goods sold	$ 730,000	$ 960,000	$ 795,000
(b) Net income	273,000	280,000	255,000
(c) Total current assets	1,252,000	1,365,000	1,235,000
(d) Total equity	1,392,000	1,585,000	1,250,000

Required: 1. For each key financial statement figure(a), (b), (c), and (d) aboveprepare a table to show the adjustments necessary to correct the reported amounts. 2. What is the total error in combined net income for the three-year period resulting from the inventory errors?