! Required information P7-6 (Algo) Analyzing and Interpreting the Effects of Inventory Errors LO7-5 [The following information applies to the questions displayed below.] The income statement for Pruitt Company summarized for a four-year period shows the following: Sales revenue Cost of goods sold Gross profit Expenses Pretax income Income tax expense (30%) Net income 2016 $2,034,000 2017 $2,454,000 2018 $2,708,000 2019 $2,988,000 1,494,000 1,611,000 1,771,000 2,108,000 540,000 843,000 937,000 880,000 471,000 498,000 535,000 526,000 69,000 345,000 402,000 354,000 20,700 103,500 120,600 106,200 $48,300 $241,500 $281,400 $247,800 An audit revealed that in determining these amounts, the ending inventory for 2017 was overstated by $17,000. The company uses a periodic inventory system. P7-6 Part 1 Required: 1. Prepare the income statements to reflect the correct amounts, taking into consideration the inventory error. Sales revenue Cost of goods sold Gross profit Expenses Pretax income Income tax expense (30%) Net income PRUITT COMPANY Income Statement For the Four-Year Period 2016 2017 2018 2019