PA7-5 (Algo) (Supplement 7B) Analyzing and Interpreting the Effects of Inventory Errors [LO 7-S2] Partial income statements for Sherwood Company summarized for a four-year period show the following: Net Sales Cost of Goods Sold Gross Profit 2018 $ 2,450,000 1,494,500 $ 955,500 2019 $ 2,850,000 1,710,000 $1,140,000 2020 $2,950,000 1,829,000 $ 1,121,000 2021 $ 3,450,000 2,104,500 $ 1,345,500 An audit revealed that in determining these amounts, the ending inventory for 2019 was overstated by $21,800. The inventory balance on December 31, 2020, was accurately stated. The company uses a periodic inventory system. Required: 1. Restate the partial income statements to reflect the correct amounts, after fixing the inventory error. 2-a. Compute the gross profit percentage for each year (a) before the correction and (b) after the correction. 2-b. Do the results lend confidence to your corrected amounts?