The statements of earnings for Pruitt Company summarized for a four-year period show the following...
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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 $2,625 $3,050 $3,300 $3,575 1,805 1,927 2,082 2,413 Gross profit Operating expenses 820 550 1,123 573 1,218 598 1,162 602 Pretax earnings Income tax expense (30%) 270 81 550 165 620 186 560 168 Net earnings $ 189 $ 385 $ 434 $ 392 An audit revealed that in determining these amounts, the ending inventory for 2016 was understated by $34. 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 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 2016 and 2017? (Do not round intermediate calculations. Round the final answers to the nearest dollar amount.) Income tax expense 2017 2016
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