Required information P7-6 (Algo) Analyzing and Interpreting the Effects of Inventory Errors LO7-5 [The following information applies to the questions displayed below.] The income statement for Pruitt Company summarized for a four-year period shows the following: Sales revenue Cost of goods sold Gross profit Expenses Pretax income Income tax expense (30%) Net income P7-6 Part 1 2016 $2,030,000 1,487,000 543,000 490,000 Sales revenue Cost of goods sold Gross profit Expenses Pretax income Income tax expense (30%) Net income 53,000 15,900 $37,100 2017 $2,459,000 1,619,000 840,000 493,000 347,000 104,100 $242,900 PRUITT COMPANY Income Statement For the Four-Year Period 2016 2017 2018 $2,716,000 1,763,000 An audit revealed that in determining these amounts, the ending inventory for 2017 was overstated by $13,000. The company uses a periodic inventory system. 953,000 534,000 419,000 125,700 $293,300 2018 Required: 1. Prepare the income statements to reflect the correct amounts, taking into consideration the inventory error. 2019 $2,992,000 2,112,000 880,000 537,000 343,000 102,900 $240,100 2019

Required information P7-6 (Algo) Analyzing and Interpreting the Effects of Inventory Errors LO7-5 [The following information applles to the questions displayed below] The income statement for Pruitt Company summarized for a four-year period shows the following: An audit revealed that in determining these amounts, the ending inventory for 2017 was overstated by $13,000. The company uses a periodic inventory system. P7.6 Part 1 Required: 1. Prepare the income statements to reflect the correct amounts, taking into consideration the inventory error