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

	2017			2018			2019			2020
Net Sales	$	2,000,000		$	2,400,000		$	2,500,000		$	3,000,000
Cost of Goods Sold		1,400,000			1,660,000			1,770,000			2,100,000
Gross Profit	$	600,000		$	740,000		$	730,000		$	900,000

An audit revealed that in determining these amounts, the ending inventory for 2018 was overstated by $20,000. The inventory balance on December 31, 2019, 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. (Round your answers to the nearest whole percent.)

2-b. Do the results lend confidence to your corrected amounts? multiple choice

• Yes

• No