P7-5 Analyzing and Interpreting the Effects of Inventory Errors L07-5 The statements of earnings for Pruitt Company summarized for a four-year period show the following (amounts in thousands of dollars) Sales revenue 2021 $2,25 2020 Cost of sales 1,905 $3,250 2,027 2019 $3,500 2018 $3,775 2,182 2,513 Groes profit 920 1,223 1,310 Operating expenses 570 593 618 622 Pretas earnings 350 630 700 640 Income tax expense (404) 140 252 280 256 Bet earnings 210 5376 420 304 An audit revealed that in determining these amounts, the ending inventory for 2019 was understated by $38. Required: 1. Revise these statements of earnings to reflect the correct amounts. (Do not round intermediate calculations. Round the final answers to the nearest dollar amount.) PRUITT COMPANY Corrected Statement of Earnings 3021 2020 2015 2018 Sales revenue $ 2.8255 3.250 $ 3.500 3775 Cost of sales 1905 2,065 2.144 Gross profit 820 1,185 1318 Operating expenses 570 503 Pretax eamings 350 502 700 income tax expense 140 178 200 Net eamings S 2105 414 $ 420 2. Did the error affect the cumulative net earnings for the four-year period? O Not affected O Affected 3. What effect did the error have on the income tax expense for 2019 and 2020? (Do not round intermediate calculations. Round the final answers to the nearest dollar amount.) Income tax expense 2020 2019