Owser Films.mhe. Homework Saved Help Save & Exit Submit Partial income statements for Murphy & Murphy (M&M) reported the following summarized amounts: Net Sales Cost of Goods Sold Gross Profit Quarter 1 $70,000 52,500 $17,500 Quarter 2 $69,000 55,200 $13,800 Quarter 3 $90,000 64,050 $25,950 Quarter 4 $78,000 57,720 $20, 280 After these amounts were reported, M&M's accountant determined the inventory at the end of Quarter 2 was understated by $3,450. The inventory balance at the end of the other three quarters was accurately stated. Required: 1. Restate the partial income statements to reflect the correct amounts, after fixing the inventory error. 2. Compute the gross profit percentage for all four quarters both (a) before the correction and (b) after the correction. Does the pattern of gross profit percentages lend confidence to your corrected amounts? TIP: Gross profit percentage is calculated as (Gross Profit Net Sales) x 100