During its first and second years of operations, ranger company, a corporation using a periodic inventory system, made undiscovered errors in taking its year-end inventories that overstated year 1 ending inventory by $160,000 and overstated year 2 ending inventory by $120,000. the combined effect of these errors on reported income is:

year 1 year 2 year 3

a. overstated overstated overstated

$160,000 $280,000 $120,000

b. overstated overstated not affected

$160,000 $120,000

c. understated understated not affected

$160,000 $280,000

d. overstated understated understated

$160,000