P7-5 Analyzing and Interpreting the Effects of Inventory Errors L07-5 The statements of earnings for Pruitt Company summarized for a four-year period show the following (amounts in thousands of dollars): Sales revenue Cost of sales Gross profit Operating expenses Pretax earnings Income tax expense (40%) Net earnings 2021 $3,925 2,455 1,470 680 790 316 $ 474 2020 $4,350 2,577 1,773 703 1,070 428 $ 642 2019 $4,600 2,732 1,868 728 1,140 456 2018 $4,875 3,063 1,812 732 1,080 432 $ 684 $ 648 An audit revealed that in determining these amounts, the ending inventory for 2019 was understated by $60. Required: 1. Revise these statements of earnings to reflect the correct amounts. (Do not round intermediate calculations. Round the final answers to the nearest dollar amount.) Sales revenue Cost of sales Gross profit Operating expenses Pretax earnings Income tax expense Net earnings Answer is complete but not entirely correct. PRUITT COMPANY Corrected Statement of Earnings 2021 2020 2019 2018 $ 3,925 $ 4,350 $ 4,600 $ 4,875 2,455 2,577 % 2,732 X 3,063 1,470 1,773 1,868 1,812 680 703 728 732 790 1,070 X 1,140 1,080 316 428 456 X 432 $ 474 642 $ 684 X $ 648 2. Did the error affect the cumulative net earnings for the four-year period? Not affected Affected 3. What effect did the error have on the income tax expense for 2019 and 2020? (Do not round intermediate calculations. Round the final answers to the nearest dollar amount.) Income tax expense 2020 2019