Small company made a $$10,000$ purchase on account a few days prior to the end of Year X$2.$ While the goods were received prior to the end of year X$2,$ the purchase was not recorded. You can assume that there were no other accounting problems and that the ending inventory was counted accurately at year endSuppose that Small's auditor discovers the unrecorded purchases during the audit of year $*2$ financial statements that was performed in January of X$3.$ Assuming the effects are material and Small has a $20\%$ tax rate, which of the following statements identifies the consequences of the accounting problem? Multiple Choice Year X$1$ income will be overstated and X$2$ income will be understated Year X$1$ income will be understated and X$2$ income will be overstated income will be overstated, but the effect on X$2$ cannot be determined income will be understated, but the effect on X$2$ cannot be determined.