​Carpets's books show the following data. In early 2020​,auditors found that the ending merchandise inventory for 2017was understated by $ 4,000and that the ending merchandise inventory for 2019 was overstated by $ 5,000.The ending merchandise inventory at December​ 31, 2018​,was correct. 2019 2018 2017Net Sales Revenue $212,000 $161,000 $169,000Cost of Goods Sold:Beginning Merchandise Inventory $20,000 $25,000 $44,000Net Cost of Purchases 134,000 95,000 80,000Cost of Goods Available for Sale 154,000 120,000 124,000Less: Ending Merchandise Inventory 30,000 20,000 25,000Cost of Goods Sold 124,000 100,000 99,000Gross Profit 88,000 61,000 70,000Operating Expenses 59,000 33,000 30,000Net Income $29,000 $28,000 $40,000Requirements:1. Prepare correct income statement of three years.2. State whether each years net income before your corrections is understand or overstated and indicate the amount of understatement or overstatement.