Morgan Industries had the following summary income statement: Period 1 amounts in thousands) Net sales $40.0 Cost of goods sold 13.5 Gross profit $26.5 Expenses Net Income $11.5 Cost of goods sold of $13,500 was based on beginning inventory of $9.000. Purchases of $20.000 and ending inventory of $15,500. However, after the period, aud tors found that ending Inventory should have been $10,000. If no other errors are noted by the auditor in Periods 1 and 2. which of the following statements is correct? Net Income for period 1 will be understated if no correction is made Net Income for period 2 will be understated if no correction is made Beginning inventory for period 2, it reported without correction, is overstated. Net income for period I will be overstated if no correction is made