The statements of earnings for Pruitt Company summarized for a four-year period show the following (amounts in thousands of dollars):

	2021			2020			2019			2018
Sales revenue	$	2,625		$	3,050		$	3,300		$	3,575
Cost of sales		1,805			1,927			2,082			2,413
Gross profit		820			1,123			1,218			1,162
Operating expenses		550			573			598			602
Pretax earnings		270			550			620			560
Income tax expense (30%)		81			165			186			168
Net earnings	$	189		$	385		$	434		$	392

An audit revealed that in determining these amounts, the ending inventory for 2019 was understated by $34.

Required:

1. Revise these statements of earnings to reflect the correct amounts. (Do not round intermediate calculations. Round the final answers to the nearest dollar amount.)

PRUITT COMPANY

Corrected Statement of Earnings

	2021	2020	2019	2018
Sales revenue
Cost of sales
Gross profit
Operating expenses
Pretax earnings
Income tax expense
Net earnings

2. Did the error affect the cumulative net earnings for the four-year period?

multiple choice

• Not affected

• Affected

3. What effect did the error have on the income tax expense for 2019 and 2020? (Do not round intermediate calculations. Round the final answers to the nearest dollar amount.)

Income tax expense

2020
2019