At the beginning of Year 1, the companys inventory level was stated correctly. At the end of Year 1, inventory was overstated by $4,000. At the end of Year 2, inventory was understated by $900. Reported net income was $6,000 in Year 1 and $6,000 in Year 2. The correct amount of net income in Year 1 and in Year 2

is

$4,000 in Year 1 and $4,900 in Year 2

.$2,000 in Year 1 and $10,900 in Year 2

$2,000 in Year 1 and $6,900 in Year 2

$8,000 in Year 2 and $1,100 in Year 2

$4,000 in Year 1 and $5,100 in Year 2