Ending Inventory of Thompson Company is overstated by $3,000 in 2014, and ending inventory is understated by $4,000 in 2015. Assuming all other…

Ending Inventory of Thompson Company is overstated by $3,000 in 2014, and ending inventory is understated by $4,000 in 2015. Assuming all other things are equal determine 

1. whether net income for 2015 is over stated or understated and by how much

2. whether 2015 ending retained earnings is overstated or understated and by how much