The accounting records of New Life Home Store show these data (in millions) (Click the icon to view the income statements.) The shareholders are very happy with New Life's steady increase in net income. However, auditors discovered that the ending inventory for 2016 was understated by $5 million and that the ending inventory for 2017 was understated by S4 million. The ending inventory at December 31, 2018, was correct Read the requirements Requirement 1. Show corrected income statements for each of the three years. New Life Home Store Income Statements (adapted; amounts in millions) Years Ended December 31, 2018, 2017, and 2016 2018 2017 2016 41 38 35 Net sales revenue Cost of goods sold Beginning inventory 281 261 24 The accounting records of New Life Home Store show these data (in millions) Click the icon to view the income statements.) The shareholders are very happy with New Life's steady increase in net income. However, auditors discovered that the ending inventory for 2016 was understated by $5 million and that the ending inventory for 2017 was understated by $4 million. The ending inventory at December 31, 2018, was correct Read the requirements Cost of goods sold Beginning inventory 28 26 24 Net purchases Cost of goods available Less ending inventory (12) (11) (10) Cost of goods sold Gross profit Operating expenses LIII Net income Requirement 2. How much did these assumed corrections add to or take away from New Life's total net income over the three-year period? How did the corrections affect the trend of net income? How much did these assumed corrections add to or take away from New Life's total net income over the three-year period? Did not change total net income How did the corrections affect the trend of net income? Changed the trend from an increasing pattern to a flat pattern Requirement 3. Will New Life's shareholders still be happy with the company's trend of net income? Explain The shareholders will not be happy with the trend of net income because the company's profit is decreasing each year