Office Stops $4.8 million cost of inventory at the end of last year was understated by $1.4

Question:

Office Stop’s $4.8 million cost of inventory at the end of last year was understated by $1.4 million.
1. Was last year’s reported gross profit of $3.7 million overstated, understated, or correct? What was the correct amount of gross profit last year?
2. Is this year’s gross profit of $4.6 million overstated, understated, or correct? What is the correct amount of gross profit for the current year?