PA7-5 (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: 2015 $2,100,000 1.449.000 $ 651,000 Net Sales Cost of Good Sold Gross Profit 2016 $2,500,000 1,700,000 $ 800,000 2017 $2,600,000 1,820.000 $ 780,000 2018 $3,100,000 2,139,000 $961,000 27 An audit revealed that in determining these amounts, the ending inventory for 2016 was overstated by $21,000. The inventory bolance on December 31, 2017, was accurately stated. The company uses a perlodic 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 (m) before the correction and (b) after the correction 2-6. Does the pattern of gross profit percentages lend confidence to your corrected amounts? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Reg 28 Restate the partial income statements to reflect the correct amounts, after fixing the inventory error. Complete this question by entering your answers in the tabs below. Req 1 Reg 2A Req 2B Restate the partial income statements to reflect the correct amounts, after fixing the inventory error. SHERWOOD COMPANY Income Statements (Corrected) 2015 2016 2017 2018 Net Sales Cost of Goods Sold Gross Profit Reg Req2A > Requireu. 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. Does the pattern of gross profit percentages lend confidence to your corrected amounts? Complete this question by entering your answers in the tabs below. Reg 1 Req ZA Req 2B Compute the gross profit percentage for each year (a) before the correction and (b) after the correction. (Round your to the nearest whole percent.) 2016 2017 2018 2015 % % Before Correction After Correction % % % % % 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. Does the pattern of gross profit percentages lend confidence to your corrected amounts? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Reg 28 Does the pattern of gross profit percentages lend confidence to your corrected amounts? Yes ONO