A company understated its ending inventory in Year 1 by $25,000 and also overstated its ending inventory in Year 2 by $30,000. Neither error was discovered until Year 3. As a result of the errors, retained earning of Year 2 was: Ugnore income tax) Understated by $5,000 Understated by $25,000 Overstated by $30,000 Overstated by $55,000