5.)

Spears & Cantrell announced inventory had been overstated by $70 at the end of its second quarter. The error wasnt discovered and corrected in the companys periodic inventory system until after the end of the third quarter. The following table shows the amounts that were originally reported by the company.

	Q1			Q2			Q3
Net Sales	$	4,000		$	4,500		$	5,000
Cost of Goods Sold		2,640			2,900			3,370
Gross Profit	$	1,360		$	1,600		$	1,630

Required:
1.	Restate the income statements to reflect the correct amounts, after fixing the inventory error.

2-a.	Compute the gross profit percentage for each quarter (a) before the correction and (b) after the correction. (Round your answers to the nearest whole percent.)

2-b.

Do the results lend confidence to your corrected amounts?

	Yes
	No