The accounting records of Oriental Rugs show these data (in thousands). As the auditor, you discovered that the ending inventory for 2015 was overstated by $100,000 and that the ending inventory for 2016 was understated by $50,000. The ending inventory at December 31, 2017, was correct.

Requirements
1. Show correct income statements for each of the three years.
2. How much did these corrections add to, or take away from, Oriental Rugs's total net income over the three-year period? How did the corrections affect the trend of net income?

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G H Oriental Rugs Income Statements for the Years Ended 2 (Amounts in thousands) 2017 A1 2015 1,100 3 Net sales revenue 4 Cost of goods sold: $ 1,400 $ 1,200 Purchases Goods available for sale Less ending inventory Cost ogods sold S 400 800 1200 (500) $300 700 1,000 Ho0) $200 600 800 (300) 700 700 500 S 200 600 600 130 $ 11O 500 600 450 5 150 10 Gross profit 11 Total operating expenses 12 Net income 13