Required information [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 (40%) Net income 2016 $ 2,032,000 1,499,000 533,000 479,000 54,000 21,600 $ 32,400 2017 $ 2,467,000 1,607,000 860,000 507,000 353,000 141,200 $ 211,800 2018 $ 2,715,000 1,769,000 946,000 538,000 408,000 163,200 $ 244,800 2019 $ 2,986,000 2,105,000 881,000 526,000 355,000 142,000 $ 213,000 An audit revealed that in determining these amounts, the ending inventory for 2017 was overstated by $19,000. The company uses a periodic inventory system. uired: repare the income statements to reflect the correct amounts, taking into consideration the inventory error. Answer is not complete. PRUITT COMPANY Income Statement For the Four-Year Period 2016 2017 2018 $ 2,032,000 $ 2,467,000 $ 2,715,000 1,499,000 1,607,000 1,769,000 533,000 860,000 946,000 2019 $ 2,986,000 2,105,000 881,000 Sales revenue Cost of goods sold Gross profit Expenses Pretax income Income tax expense (40%) Net income 2. Compute the gross profit percentage for each year before the correction and after the correction. (Round your answers to the nearest whole percent.) Before correction After correction 2016 % % 2017 % % 2018 % % 2019 % % 3. What effect would the error have had on the income tax expense assuming a 40 percent average rate? Income Tax Expense 2017 2018