During its first year of operations, Richmond Company, using a periodic inventory system, made undiscovered errors in taking its year-end inventory that overstated Year 1 ending inventory by $150,000. The effect of these errors on reported income is: Select one: O A. Year 1 Overstated $150,000 Year 2 Overstated $150,000 OB. Year 1 Overstated $150,000 Year 2 Not affected Year 1 Year 2 Understated Understated $150,000 $150,000 D. Year 1 Overstated $150,000 Year 2 Understated $150,000