The beginning inventory balance for Year 1 is correct. The ending inventory balance for Year 2 is also correct. However, the ending inventory figure for Year 1 was overstated by $20,000. Given this information, the correct gross profit figures for Year 1 and Year 2 would be:

Year one
Beginning inventory : 132,000
Ending: 144,0000

Year two
Beginning inventory : 144,000
Ending:152,000

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