The income statement for Pruitt Company summarized for a four-year period shows the following: 2014 2015 2016 2017 Sales revenue $ 2,027,000 $ 2,469,000 $ 2,714,000 $ 2,982,000 Cost of goods sold 1,505,000 1,619,000 1,778,000 2,107,000 Gross profit 522,000 850,000 936,000 875,000 Expenses 485,000 511,000 524,000 537,000 Pretax income 37,000 339,000 412,000 338,000 Income tax expense (35%) 12,950 118,650 144,200 118,300 Net income $ 24,050 $ 220,350 $ 267,800 $ 219,700 An audit revealed that in determining these amounts, the ending inventory for 2015 was overstated by $27,000. The company uses a periodic inventory system. 3.value: 10.00 pointsRequired information Required: 1. Prepare the income statements to reflect the correct amounts, taking into consideration the inventory error. ReferenceseBook & Resources ProblemDifficulty: Hard Check my work 4.value: 10.00 pointsRequired information 2. Compute the gross profit percentage for each year before the correction and after the correction. (Round your answers to the nearest whole percent.) ReferenceseBook & Resources ProblemDifficulty: Hard Check my work 5.value: 10.00 pointsRequired information 3. What effect would the error have had on the income tax expense assuming a 35 percent average rate?