The income statement for Big Booty Leggings summarized for a four-year period shows the following:

		2016		2017		2018		2019
Sales revenue	$	2,044,000	$	2,450,000	$	2,701,000	$	2,986,000
Cost of goods sold		1,485,000		1,616,000		1,762,000		2,109,000
Gross profit		559,000		834,000		939,000		877,000
Expenses		475,000		499,000		532,000		540,000
Pretax income		84,000		335,000		407,000		337,000
Income tax expense (30%)		25,200		100,500		122,100		101,100
Net income	$	58,800	$	234,500	$	234,500	$	235,900

An audit revealed that in determining these amounts, the ending inventory for 2017 was overstated by $26,000. The company uses a periodic inventory system.

Required 1. Prepare the income statements to reflect the correct amounts, taking into consideration the inventory error PRUITT COMPANY Income Statement For the Four-Year Period 2016 2017 2018 2019 Sales revenue Cost of goods sold Gross proft Expenses Pretax income Income tax expense (30%) Net income $2,044,000 2,450,000 $2,701,000 2,986,000 2,109,000 877,000 540,000 337,000 101,100 $ 235,900 1,485,0001,642,000 808,000 499,000 309,000 92,700 $ 58,800 216,300 559,000 475,000 84,000 25,200 532,000