Pond Rush Carpets books show the following data Click the icon to view the income statements.) In early 2026, auditors found that the ending merchandise inventory for 2023 was understated by $7,000 and that the ending merchandise inventory for 2025 was overstated by $8,000. The ending merchandise inventory at December 31, 2024 was correct. Read the requirements. 2023 Requirement 1. Prepare corrected income statements for the three years. Pond Rush Carpets Income Statement For the Years Ended December 31, 2025, 2024, and 2023 2025 2024 Ending Merchandise Ending Merchandise Inventory Overstated Inventory Understated by $8.000 Correct by $7.000 Net Sales Revenue $ 200,000 $ 168,000 $ 189,000 Cost of Goods Sold: Beginning Merchandise Inventory $ 23,000 $ 37.000 5 42.000 Plus: Net Cost of Inventory Purchased 137 000 101,000 90.000 Cost of Goods Available for Sale 160.000 138,000 132.000 Less: Ending Merchandise Inventory 24.000 23,000 37.000 Cost of Goods Sold 136,000 115,000 95.000 Gross Profit 64.000 53,000 88.000 Operating Expenses 42.000 34,000 41,000 Net Income 22.000 19.000 47.000 Requirement 2. State whether each year's net income--before your correctionsts understated or overstated, and indicate the amount of the understatement or overstatement 7,000 Year Prior to correction net income was 2025 overstated by $ 8,000 2024 overstated by $ 7.000 2023 understated by s Requirement 3. Compute the inventory turnover and days' sales in inventory using the corrected income statement for the three years. (Round all numbers to two decimals.) Select the labels and enter the amounts to compute inventory turnover for each year. (Round your answers to two decimal places, XXX) Cost of Goods Sold Average Merchandise Inventory Inventory turnover 2025 times 2024 times 2023 times - 1 1 X Data Table 2023 2025 $ 200,000 2024 $ 168,000 $ 183,000 two $ 23,000 137,000 $ 30,000 101.000 Net Sales Revenue Cost of Goods Sold: Beginning Merchandise Inventory Plus: Net Cost of Inventory Purchased Cost of Goods Available for Sale Less: Ending Merchandise Inventory Cost of Goods Sold Gross Profit Operating Expenses Net Income 42,000 90,000 132,000 30,000 160,000 32,000 131,000 23,000 128,000 108,000 102.000 60,000 72,000 42,000 81,000 41.000 34.000 30,000 26,000 40,000 Print Done