quesntion ( lab 7 chapter 7)

Partial income statements for Sherwood Company summarized for a four-year period show the following: 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-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? Yes No