P7-5 Analyzing and Interpreting the Effects of Inventory Errors LO7-5 The statements of earnings for Pruitt Company summarized for a four-year period show the following (amounts in thousands of dollars): Sales revenue Cost of sales 2018 2017 2016 2015 $3,825 $4,250 $4,500 $4,775 2,405 2,527 2,682 3,013 Gross profit Operating expenses 1,420 670 1,723 693 1,818 718 1,762 722 1,040 Pretax earnings Income tax expense (30%) 750 225 1,030 309 1,100 330 312 Net earnings $ 525 $ 721 $ 770 $ 728 An audit revealed that in determining these amounts, the ending inventory for 2016 was understated by $58. 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 2018 2017 2016 2015 Sales revenue Cost of sales Gross profit Operating expenses Pretax earnings Income tax expense Net earnings What effect did the error have on the income tax expense for 2016 and 2017? (Do not round intermediate calculations. Round the final answers to the nearest dollar amount.) Income tax expense 2017 2016