Several years ago, the financial statements of Montgomery Greeting Cards, now part of Nation Salutations,contained the following note: On July the Company announced that it had determined that the inventory . . . nad been overstated. . . . The overstatement of inventory . . . was $8,8 600 Montgomery Greeting Cards reported an incorrect net income amount of $25,932,000 for the year in which the error oocurred and the income tax rate was 31.60 percent. Required 1. Compute the amount of net income that Montgomery Greeting Cards reported after correcting the inventory error. ncoime 2. Assume that the inventory error was not discovered. Identify the financial statement accounts that would have been incorrect (e) for the year the error occurred and (b) for the subsequent year. State whether each account was understated, overstated, or correct (meaning that there was no effect) Account Year of Error Subsequent Yea Beginning inventory Cost of goods sold Ending inventory Incorme tax expense Net income Retained earnings Taxes payable