! Required information P7-9 (Algo) Analyzing and Interpreting the Effects of Inventory Errors L07-7 [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 2016 $ 2,031,000 1,491,000 540,000 484,000 56,000 16,800 $ 39,200 2017 $ 2,460,000 1,623,000 837,000 511,000 326,000 97,800 $ 228,200 2018 $ 2,718,000 1,764,000 954,000 536,000 418,000 125,400 $ 292,600 2019 $ 2,994,000 2,100,000 894,000 524,000 370,000 111,000 $ 259,000 An audit revealed that in determining these amounts, the ending inventory for 2017 was overstated by $25,000. The company uses a periodic inventory system. P7-9 Part 1 Required: 1. Prepare the income statements to reflect the correct amounts, taking into consideration the inventory error. PRUITT COMPANY Income Statement For the Four-Year Period 2016 2017 2018 2019 Sales revenue Cost of goods sold Gross profit Expenses Pretax income Income tax expense (30%)