Lake Air Carpets' books show the following data (in thousands). In early 2009 , auditors found that the ending inventory for 2006 was understated by \(\$ 8\) thousand and that the ending inventory for 2008 was overstated by \(\$ 4\) thousand. The ending inventory at December 31, 2007, was correct.

Requirements 

1. Show corrected income statements for the three years.

2. State whether each year's net income-before your corrections-is understated or overstated. For each incorrect figure, indicate the amount of the understatement or overstatement. 

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(Thousands) Net sales revenue Cost of goods sold: Beginning inventory.. Net purchases..... Cost of goods available. Less: Ending inventory Cost of goods sold.. Gross profit................ Operating expenses. Net income 2008 2007 2006 $360 $285 $244 $ 65 $ 55 $ 70 195 135 130 260 190 200 (70) (65) (55) 190 125 145 170 160 99 113 109 76 $ 57 $ 51 $ 23