Could you explain why the year 1 cogs was understated and year 2 retained earnings was correct? Thanks

During the year 1 year-end physical inventory count at Tequesta Corporation, $40,000 worth of inventory was counted twice. Assuming that the year 2 year-end inventory was correct, the result of the year 1 error was that Year 1 income was overstated, and year 2 ending inventory was overstated. Year 1 retained earnings was understated, and year 2 ending inventory was correct. Year 1 cost of goods sold was understated, and year 2 retained earnings was correct. Year 1 cost of goods sold was overstated, and year 2 income was understated