New Life Video Sales Ltd. reported the following data. The shareholders are very happy with New Life's steady increase in net income (Click the icon to view the income statements.) Auditors discovered that the ending inventory for 2018 was understated by $1 million and that the ending inventory for 2019 was also understated by $1 million The ending inventory at December 31, 2020, was correct Requirements 1. Show corrected income statements for each of the three years 2. How much did these assumed corrections add to or take away from New Life's total net income over the three-year period? How did the corrections affect the trend of net income? 3. Will New Life's shareholders still be happy with the company's trend of net income? Give a reason for your answer Requirement 1. Show corrected income statements for each of the three years. New Life Video Sales Ltd. Income Statements (adapted amounts in millions) Years Ended December 31, 2020, 2019, and 2018 2020 2019 2018 Net sales revenue Cost of goods sold Beginning inventory Purchases Goods available for sale Less: Ending inventory Cost of goods sold Gross profit Total operating expenses Clear All New Life Video Sales Ltd. Income Statements for the Years Ended (Amounts in millions) 2020 2019 2018 Net sales revenue $ 37 34 $ 31 Cost of goods sold: Beginning inventory $ 9 $ 8 $ 7 28 26 24 Purchases Goods available for sale 37 34 31 (10) (9) (8) Less: Ending inventory 27 25 23 Cost of goods sold Gross profit 10 9 8 7 7 Total operating expenses $ $ 2 $ 1 Net income