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

	2015			2016			2017			2018
Net Sales	$	1,200,000		$	1,600,000		$	1,700,000		$	2,200,000
Cost of Goods Sold		936,000			1,232,000			1,343,000			1,716,000
Gross Profit	$	264,000		$	368,000		$	357,000		$	484,000

An audit revealed that in determining these amounts, the ending inventory for 2016 was overstated by $12,000. The inventory balance on December 31, 2017, was accurately stated. The company uses a periodic inventory system. Required:

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

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

• 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		%		%		%		%