connect 6-3

Vibrant Company had $850,000 of sales in each of three consecutive years 2014–2016, and it purchased merchandise costing $500,000 in each of those years. It also maintained a $250,000 physical inventory from the beginning to the end of that three-year period. In accounting for inventory, it made an error at the end of year 2014 that caused its year-end 2014 inventory to appear on its statements as $230,000 rather than the correct $250,000.

Prepare comparative income statements to show the effect of this error on the company's cost of goods sold and gross profit for each of the years 2014−2016.