Overstatement of ending inventory for year 1 has the following impacts on year 2:

Select one:

a.cost of goods sold to be overstated and net income to be overstated.

b.cost of goods sold to be understated and net income to be understated.

c.cost of goods sold to be overstated and net income to be understated.

d.cost of goods sold to be understated and net income to be overstated.

e.cost of goods sold and net income would be correct.