Evergreen Carpets' books show the following data. In early 2013, auditors found that the ending inventory for 2010 was understated by $6,000 and that the ending inventory for 2012 was overstated by $7,000. The ending inventory at December 31, 2011, was correct.

Requirements
1. Prepare corrected income statements for the three years.
2. State whether each year's net income'before your corrections'is understated or overstated and indicate the amount of the understatement oroverstatement.

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2012 2010 2011 $169,000 Net sales revenue Cost of goods sold: Beginning inventory Net purchases Cost of goods available Ending inventory Cost of goods sold Gross profit Operating expenses Net income. $162,000 $210,000 $ 20,000 140,000 $ 27,000 $ 41,000 108,000 98,000 $139,000 (27,000) $160,000 $135,000 (29,000) (20,000) 131,000 115,000 112,000 $ 79,000 53,000 $ 26,000 ..... 24,000 18,000 $ 33,000 $ 29,000