Question 1 (2 points) During the taking of its inventory on December 31, 2020.Volk Inc. Incorrectly counted its ending Inventory as 3500.000 indead of the come amount of $525.000. The effect on the balance sheet and income statement would be follows: a) Ending Inventory understated by $25,000 Net Income understated by $25,000, Retained Camins understated by $25.000 b) Ending Inventory overstated by 325,000, no effect on the income statement Retained Earnings is understated by 325.000 c) Ending Inventory overstated by $25,000.net Income overststed by $25,000 Retained Eamings is overstated by $25.000 d) Ending Inventory overstated by $25,000, net income understated by $25.000, Retained Eamings is understated by $25,000