The accounting records of Keller Music Stores show these data (in thousands):

In early 2024, a team of auditors discovered that the ending inventory of 2021 had been understated by $10,000. Also, the ending inventory for 2023 had been overstated by $6,000. The ending inventory at December 31, 2022, was correct.

Required

1. Show corrected comparative income statements for the 3 years.

2. State whether each year’s net income as reported here and the related owner’s equity amounts are understated or overstated. For each incorrect figure, indicate the amount of the understatement or overstatement.

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Net sales revenue Cost of goods sold Beginning inventory Net purchases Cost of goods available Less: Ending inventory Cost of goods sold Gross margin Operating expenses Net income 2023 $ 56 276 332 92 $426 240 186 148 $38 2022 $ 80 240 320 56 $366 264 102 92 $10 2021 $ 96 216 312 80 $378 232 146 110 $36