The following information applies to the questions displayed below.]

The income statement for Pruitt Company summarized for a four-year period shows the following:

	2016	2017	2018	2019
Sales revenue	$2,035,000	$2,452,000	$2,711,000	$2,990,000
Cost of goods sold	1,501,000	1,618,000	1,764,000	2,098,000
Gross profit	534,000	834,000	947,000	892,000
Expenses	485,000	505,000	537,000	536,000
Pretax income	49,000	329,000	410,000	356,000
Income tax expense (30%)	14,700	98,700	123,000	106,800
Net income	$34,300	$230,300	$287,000	$249,200

An audit revealed that in determining these amounts, the ending inventory for 2017 was overstated by $13,000. The company uses a periodic inventory system.

P7-6 Part 1

Required:

1. Prepare the income statements to reflect the correct amounts, taking into consideration the inventory error.