Question
[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
[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 $ 2,034,000 $ 2,467,000 $ 2,720,000 $ 2,976,000 Cost of goods sold 1,489,000 1,612,000 1,777,000 2,093,000 Gross profit 545,000 855,000 943,000 883,000 Expenses 476,000 497,000 530,000 523,000 Pretax income 69,000 358,000 413,000 360,000 Income tax expense (35%) 24,150 125,300 144,550 126,000 Net income $ 44,850 $ 232,700 $ 232,700 $ 234,000 An audit revealed that in determining these amounts, the ending inventory for 2017 was overstated by $14,000. The company uses a periodic inventory system. 1. Prepare the income statements to reflect the correct amounts, taking into consideration the inventory error.
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