Subsequent to the development of their 2016 financial statements, Jay Company discovered the following errors:

Ending inventory for 2015 was overstated by $5,000

Ending inventory for 2016 was understated by$7,000

As a result of the 2 errors, net income for 2016 would be:

	A.	Understated by $7,000
	B.	Understated by $2,000
	C.	Overstated by $2,000
	D.	Overstated by $7,000
	E.	Understated by $12,000