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: Net Sales Cost of Goods Seld Gross Profit 2015 2016 $2,400,000 $2,100,000 1,584,000 1,120,000 $ 16,000 $90,000 2017 2018 $2,900,000 $3,400,000 1,30,000 2,240,000 $957,000 $1,156,000 An audit revealed that in determining these amounts, the ending Inventory for 2016 was overstated by $24,000. The inventory balance on December 31, 2017, 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 2-0. Compute the gross profit percentage for each year (a) before the correction and (6) after the correction 2-b. Does the pattern of gross prolit percentages lend confidence to your corrected amounts? Reg 1 Reg 2A Reg 28 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 Complete this question by entering your answers in the tabs below. Req1 Req ZA Req 25 Compute the gross profit percentage for each year (a) before the correction and (b) after the correction. (Round your answers to the nearest whole percent.) 2015 2016 2017 2018 % Before Correction After Correction % % 96