Silverado Inc. reported net incomes for the last three years as follows:

2018, $ 62,000;

2019, $ 63,000;

2020, $ 60,000

In reviewing the accounts in 2021 (after the books for the prior year had been closed), you find that the following errors have been made:

Overstatement of ending inventory

2018 $7,000

2019 $8,500

2020 $4,000

Understatement of accrued advertising expense

2018 $ 1,100

2019 $2,000

2020 $1,200

Required: a) Calculate corrected net incomes for 2018, 2019, and 2020.

b) Prepare the entry required in 2021 to correct the books. Ignore income taxes. Show any calculations.