Partial income statements for Sherwood Company summarized for a four-year period show the following:

	2015			2016			2017			2018
Net Sales	$	1,400,000		$	1,800,000		$	1,900,000		$	2,400,000
Cost of Goods Sold		1,064,000			1,350,000			1,463,000			1,824,000
Gross Profit	$	336,000		$	450,000		$	437,000		$	576,000

An audit revealed that in determining these amounts, the ending inventory for 2016 was overstated by $14,000. The inventory balance on December 31, 2017, was accurately stated. The company uses a periodic inventory system. Required:

1. 2-a. Restate the partial income statements to reflect the correct amounts, after fixing the inventory error.
2. 2-b. Compute the gross profit percentage for each year (a) before the correction and (b) after the correction.
3. 2-c. Does the pattern of gross profit percentages lend confidence to your corrected amounts?

An audit revealed that in determining these amounts, the ending inventory for 2016 was overstated by $14,000. The inventory balance on December 31, 2017, was accurately stated. The company uses a periodic inventory system. Required:

. Restate the partial income statements to reflect the correct amounts, after fixing the inventory error.

1. 2-a. Compute the gross profit percentage for each year (a) before the correction and (b) after the correction.
2. 2-b. Does the pattern of gross profit percentages lend confidence to your corrected amounts?\