At the beginning of Year 1, the companys inventory level was stated correctly. At the end of Year 1, inventory was understated by $2,000. At the end of Year 2, inventory was overstated by $450. Reported net income was $3,000 in Year 1 and $3,000 in Year 2. The correct amount of net income in Year 1 and in Year 2 is

$2,000 in Year 1 and $2,450 in Year 2

$1,000 in Year 1 and $5,450 in Year 2

$1,000 in Year 1 and $3,450 in Year 2

$1,000 in Year 1 and $550 in Year 2

$5,000 in Year 1 and $550 in Year 2

$5,000 in Year 1 and $2,550 in Year 2

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

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