_ (Error Analysis and Correcting Entry) The reported net incomes for the first 2 years of Sandra Gustafson Products, Inc., were as follows: 2007, $147,000; 2008, $185,000. Early in 2009, the following errors were discovered.

1. Depreciation of equipment for 2007 was overstated $17,000.

2. Depreciation of equipment for 2008 was understated $38,500.

3. December 31, 2007, inventory was understated $50,000.

4. December 31, 2008, inventory was overstated $16,200.

Instructions Prepare the correcting entry necessary when these errors are discovered. Assume that the books are closed.
(Ignore income tax considerations.)