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 2021 $3,125 2020 2019 2018 $3,550 $3,800 $4,075 2,055 2,177 2,332 2,663 Gross profit 1,070 1,373 1,468 1,412 Operating expenses 600 623 648 652 Pretax earnings 470 750 820 760 Income tax expense (40%) 188 300 328 304 Net earnings $ 282 $ 450 $ 492 $ 456 An audit revealed that in determining these amounts, the ending inventory for 2019 was understated by $44. 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 2021 2020 2019 2018 Sales revenue Cost of sales Gross profit Operating expenses Pretax earnings Income tax expense Net earnings 2. Did the error affect the cumulative net earnings for the four-year period? O Not affected 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.) 2020 2010 Income tax expense