Mike?s Custom Furniture, Inc., reported the following comparative income statements for the years ended April 30, 2018, and April 30, 2017.

During 2018, Mike?s Custom Furniture, Inc., discovered that the 2017 ending inventory, as previously reported, was overstated by $1,900.

Requirements

1. Prepare the corrected comparative income statements for the two-year period, complete with a heading for the statements.

2. What was the effect of the error on net income for the two years combined? Explain your answer.

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Mike's Custom Furniture, Inc. Comparative Income Statements For the Years Ended April 30, 2018 and 2017 2018 $194,000 2017 Sales Revenue $163,000 Cost of Goods Sold: $ 9,100 89,700 98,800 $13,600 106,300 119,900 Beginning Inventory Net Purchases Cost of Goods Available for Sale Ending Inventory Cost of Goods Sold 18,500 13,600 101,400 92,600 25,700 $ 66,900 85,200 77,800 19,200 $ 58,600 Gross Profit Operating Expenses Net Income